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Caledonia Products Integrative Program Essay

955 words - 4 pages

Caledonia Products Integrative Program

FIN 370 - Finance for Business

|Operating Cash Flow |Year One |Year Two |Year Three |Year Four |Year Five |
|Project Revenue |$21,000,000 |$36,000,000 |$42,000,000 |$24,000,000 |$15,600,000 |
|Cost of Goods Sold |($12,600,000) |($21,600,000) |($25,200,000) |($14,400,000) |($10,800,000) |
|Fixed Costs |($200,000) |($200,000) ...view middle of the document...

2.) |Operating Cash Flow | | | | | | | | | | | |Year |1 |2 |3 |4 |5 | | | | | |EBIT | |$6,600,000 |$12,600,000 |$15,000,000 |$7,800,000 |$3,000,000 | | | | | |Taxes | |($2,244,000) |($4,284,000) |($5,100,000) |($2,652,000) |($1,020,000) | | | | | |Depreciation | |$1,600,000 |$1,600,000 |$1,600,000 |$1,600,000 |$1,600,000 | | | | | |Operating Cash Flow |$5,956,000 |$9,916,000 |$11,500,000 |$6,748,000 |$3,580,000 | | | | |

| | | | | | | | | | | |3.) |Initial Outlay | | | | | | | | | | | |Net Working Capital | | | | | | | | | | | | |Inital Working Capital |Year |1 |2 |3 |4 |5 | | | | |$100,000 | | | | | | | | |Revenue | | | | |$21,000,000 |$36,000,000 |$42,000,000 |$24,000,000 |$15,600,000 | | |Net Working Captital | | | |$2,100,000 |$3,600,000 |$4,200,000 |$2,400,000 |$1,560,000 | | |Liquidation | | |  |  |  |  |  |($1,560,000) | | |Change In Working Capital | | | |$2,000,000 |$1,500,000 |$600,000 |-$1,800,000 |-$2,400,000 | |

4) |Free Cash Flow: |  |  |  |  |  |  | | |Operating Cash Flow |  |$5,956,000 |$9,916,000 |$11,500,000 |$6,748,000 |$3,580,000 | | |Minus: Change in Net Working Capital |$100,000 |$2,000,000 |$1,500,000 |$600,000 |($1,800,000) |($2,400,000) | | |Minus: Change in Capital Spending |$8,000,000 |0 |$0 |0 |0 |0 | | |Free Cash Flow: |($8,100,000) |$3,956,000 |$8,416,000 |$10,900,000 |$8,548,000 |$5,980,000 | | |  |  |  |  |  |  |  | | |NPV = |  |$16,731,096 |  |  |  |  | | |IRR = |77% |  |  |  |  |  | | | | | | | | | | |5) |Years |0 |1 |2 |3 |4 |5 | | |Cash Flow | $ (8,100,000) | $ 5,956,000 | $ 9,916,000 | $ 11,500,000 | $ 6,748,000 | $ 3,580,000 | | |Discount Rate |  |1.34 |2.68 |4.02 |5.36 |6.7 | | |  |  | $ 4,444,776 | $ 3,700,000 | $ ...

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