Solution 1 47 500 000 10 800 000 58 300 000 Contract Spot Total Initial NWC 2915000 CF today is Equipment Land NWC Total Year 2 3 4 47 500 000 47 500 000
Solution Contract Spot Total Initial NWC CF today is Equipment Land
Solution Contract Spot Total Initial NWC CF today
Spot Total Initial NWC CF today is Equipment Land NWC Total Year
Solution Contract Spot Total Initial NWC CF
today is Equipment Land NWC Total Year
Solution Contract Spot Total Initial
Solution Contract
(Solution) 1 47,500,000 10,800,000 58,300,000 Contract Spot Total Initial NWC 2915000 CF today is: Equipment Land NWC Total Year 2 3 4 47,500,000 47,500,000...

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Can you please calculate the Net Present Value with the information on the attached file?Year 1 2 3 4 Contract 47,500,000 47,500,000 47,500,000 47,500,000 Spot 10,800,000 16,200,000 20,700,000 8,100,000 Total 58,300,000 63,700,000 68,200,000 55,600,000 Initial NWC 2915000 CF today is: Equipment -85,000,000.00 Land -7,000,000.00 NWC -2,915,000.00 Total -94,915,000.00 OCF Year 1 2 3 4 5 6 Sales 58,300,000 63,700,000 68,200,000 55,600,000 Less: Variable Cost 19,220,000 21,080,000 22,630,000 18,290,000 Less: Fixed Cost 4,300,000 4,300,000 4,300,000 4,300,000 2,800,000 7,500,000 Less: Depreciation 12,155,000 20,825,000 14,875,000 10,625,000 EBIT 22,625,000 17,495,000 26,395,000 22,385,000 -2,800,000 -7,500,000 Tax @ 38% 8,597,500 6,648,100 10,030,100 8,506,300 -1,064,000 -2,850,000 Net Income 14,027,500 10,846,900 16,364,900 13,878,700 -1,736,000 -4,650,000 Add: Depreciation 12,155,000 20,825,000 14,875,000 10,625,000 OCF 26,182,500 31,671,900 31,239,900 24,503,700 -1,736,000 -4,650,000 Year 1 2 3 4 Beginning WC 2,915,000 3,185,000 3,410,000 2,780,000 Ending WC 3,185,000 3,410,000 2,780,000 0 NWC CF -270,000 -225,000 630,000 2,780,000 Book Value of Equipment= 85,000,000 - 12,155,000 - 20,825,000 - 14,875,000 - 10,625,000 Book Value of Equipment= 26,520,000 Market Value of Equipment is 51,000,000 Taxes on sale of equipment= (51,000,000 - 26,520,000) (.38) = 9,302,400 After-tax salvage value= 51,000,000 - 9,302,400 After-tax salvage value= 41,967,600 Present Value of Future Cash Flows= 23,139,416 + 25,063,179 + 22,691,369 + 43,865,747 (984,312) (2,357,550)= Present Value of Future Cash Flows= 111,417,849 Profitability Index= Present Value of Future Cash Flows of 111,417,849/ Initial Capital Outlay of 94,915,000 Profitability Index=1.17 Net Cash Flow Year 0 1 2 3 4 5 6 Capital Spending -85,000,000 0 0 0 41,697,600 0 0 Opportunity -7,000,000 Cost NWC -2,915,000 -270,000 -225,000 630,000 2,780,000 OCF 26,182,000 31,671,900 31,239,900 24,503,700 -1,736,000 -4,650,000 Total Project CF -94,915,000 25,912,000 31,446,900 31,869,900 68,971,300 -1,736,000 -4,650,000 Net Present Value Year 0 1 2 3 4 5 6 OCF -94,915,000 25,912,000 31,446,900 31,869,900 68,971,300 -1,736,000 -4,650,000 PV Factor 12% 1 0.893 0.797 0.712 0.636 0.567 0.507 PV -94,915,000 23,139,416 25,063,179 22,691,369 43,865,747 -984,312 -2,357,550 NPV

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