Problem 5 ( Capital Budgeting Cash Flow)

Price of new machine $ 115,000

by instalasi $ 3,750
by pengiriman $ 1,250
total cost of new machine $ 120,000

Initial Investment
Cost of new machine $ 120,000
(-)After tax sales procees of new machine
Sales Proceed $ 35,000
Tax on gain $ 7,272 $ 27,728
(+/-)Changes in net working capital $ 20,000
Initial Investment $ 112,272

Operating cash flow New machine cost $ 120,000

2020 2021 2022 2023 2024 2025
Revenue $ 320,000 $ 480,000 $ 552,000 $ 414,000 $ 240,000 $ -
FC $ 105,000 $ 105,000 $ 105,000 $ 105,000 $ 105,000 $ -
VC (25%) $ 80,000 $ 120,000 $ 138,000 $ 103,500 $ 60,000 $ -
EBDIT $ 135,000 $ 255,000 $ 309,000 $ 205,500 $ 75,000 $ -
depre $ 24,000 $ 38,400 $ 22,800 $ 14,400 $ 14,400 $ 6,000
EBT $ 111,000 $ 216,600 $ 286,200 $ 191,100 $ 60,600 $ (6,000)
tax (40%) $ 44,400 $ 86,640 $ 114,480 $ 76,440 $ 24,240 $ (2,400)
EAT $ 66,600 $ 129,960 $ 171,720 $ 114,660 $ 36,360 $ (3,600)
depre $ 24,000 $ 38,400 $ 22,800 $ 14,400 $ 14,400 $ 6,000
OCF $ 90,600 $ 168,360 $ 194,520 $ 129,060 $ 50,760 $ 2,400

Old machine Cost $65,750 (58000+2000+5750)

2021 2021 2022 2023 2024
Revenue $ 240,000 $ 300,000 $ 500,000 $ 288,000 $ 210,000
FC $ 70,000 $ 70,000 $ 70,000 $ 70,000 $ 70,000
VC (30%) $ 72,000 $ 90,000 $ 150,000 $ 86,400 $ 63,000
EBDIT $ 98,000 $ 140,000 $ 280,000 $ 131,600 $ 77,000
depre $ 13,150 $ 21,040 $ 12,493 $ 7,890 $ 7,890
EBT $ 84,850 $ 118,960 $ 267,507 $ 123,710 $ 69,110
tax (40%) $ 33,940 $ 47,584 $ 107,003 $ 49,484 $ 27,644
EAT $ 50,910 $ 71,376 $ 160,504 $ 74,226 $ 41,466
depre $ 13,150 $ 21,040 $ 12,493 $ 7,890 $ 7,890
OCF $ 64,060 $ 92,416 $ 172,997 $ 82,116 $ 49,356
Old Machine
Cost 58000
Depre 41180
BV 16820
FV 35000
Gain 18180

Incremental Cash Flow

Tahun OCF New OCF Old ICF
2020 $ 90,600 $ 64,060 $ 26,540
2021 $ 168,360 $ 92,416 $ 75,944
2022 $ 194,520 $ 172,997 $ 21,523
2023 $ 129,060 $ 82,116 $ 46,944
2024 $ 50,760 $ 49,356 $ 1,404
2025 $ 2,400 $ - $ 2,400

New Machine
Terminal Cashflow Cost 120000
Sales proceed of new machine depre 114000
in sales proceed $ 30,000 BV 6000
tax on gain $ (9,600) $ 39,600 FV 30000
Sales proceed of new machine after tax Loss -24000
in sales proceed $ -
tax on gain $ - $ -
changes in net working capital $ 20,000
Terminal Cashflow $ 59,600