A B C D E F G H

1 MAVS & CO
2 Current market value of the building for factory site $ 405,000
3 Resale value of the building after 5 years $ 405,000
4 Cost of bowling ball machine $ 390,000
5 market value of machine at the end of five years $ 34,000
6
7 Price of bowling ball during the 1st year $ 80
8 Bowling ball price growth 5%
9 Production cost of bowling ball during the 1st year $ 45
10 Bowling ball cost growth 8%
11
12 Tax bracket 34%
13 Discount rate 12%
14 YEAR
15 0 1 2 3 4 5
16 NWC $ 20,000 $ 35,000 $ 30,000 $ 20,000 $ 30,000 $ -
17 Production (in units) 6,000 8,000 13,000 10,000 7,000
18 Depreciation Percentage of the bowling ball machine 20.00% 32.00% 19.20% 11.52% 11.52% 5.76%
19 Unit price $ 80.00 $ 84.00 $ 88.20 $ 92.61 $ 97.24
20 Unit cost $ 45.00 $ 48.60 $ 52.49 $ 56.69 $ 61.22
21
22 YEAR
23 0 1 2 3 4 5
24 (1) Total Revenue $ 480,000 $ 672,000 $ 1,146,600 $ 926,100 $ 680,684
25 (2) Total Costs $ (270,000) $ (388,800) $ (682,344) $ (566,870)$ (428,554)
26 (3) Depreciation $ (78,000) $ (124,800) $ (74,880) $ (44,928)$ (44,928)
27 (4) EBIT [(1)+(2)+(3)] $ 132,000 $ 158,400 $ 389,376 $ 314,302 $ 207,201
28 (5) Tax $ (44,880) $ (53,856) $ (132,388) $ (106,863)$ (70,449)
29 (6) OCF [(1)+(2)+(5)] $ 165,120 $ 229,344 $ 331,868 $ 252,367 $ 181,681
30 (7) Bowling Ball Machine $ (390,000) $ 30,078
31 (8) Warehouse (Opportunity Cost) $ (405,000) $ 405,000
32 (9) Change in NWC $ (20,000) $ (15,000) $ 5,000 $ 10,000 $ (10,000) $ 30,000
33 (10) Total CF of Investment [(7)+(8)+(9)] $ (815,000) $ (15,000) $ 5,000 $ 10,000 $ (10,000) $ 465,078
34 (11) IATCF [(6)+(10)] $ (815,000) $ 150,120 $ 234,344 $ 341,868 $ 242,367 $ 646,759
35
36 NPV of the project $270,205
37 IRR of the project 22.11%