Net Present Value Analysis Wolverine Corporation

u02a2 Professional Challenge Net Present Value analytic thinking capital letter Bud repairing Analysis: Wolverine good deal | Year 0| Year 1| Year 2| Year 3| 1. Demand| | 40,000| 50,000| 60,000| 2. equipment casualty per unit| | NZ$ euchre| NZ$511| NZ$530| 3. sum total revenue = (1) x (2)| | NZ$20,000,000| NZ$25,550,000| NZ$31,800,000| 4. protean hail per unit| | NZ$30| NZ$35| NZ$40| 5. Total changeable cost = (1)x(4)| | NZ$1,200,000| NZ$1,750,000| NZ$2,400,000| 6. Fixed cost| | NZ$6,000,000| NZ$6,000,000| NZ$6,000,000| 7. Interest expense of NewZealand loanword| | NZ$2,800,000| NZ$2,800,000| NZ$2,800,000| 8. Non currency expense (depreciation)| | NZ$5,000,000| NZ$5,000,000| NZ$5,000,000| 9. Total expenses = (5)+(6)+(7)+(8)| | NZ$15,000,000| NZ$15,550,000| NZ$16,200,000| 10. Before-tax earnings of subsidiary= (3)-(9)| | NZ$5,000,000| NZ$10,000,000| NZ$15,600,000| 11. many government tax (30%)| | NZ$1,500,000| NZ$3,000,000| NZ$4,680,000| 12. After-tax earnings of subsidiary| | NZ$3,500,000| NZ$7,000,000| NZ$10,920,000| 13. Net notes unravel to subsidiary= (12)+(8)| | NZ$8,500,000| NZ$12,000,000| NZ$15,920,000| 14. NZ$ remitted by sub.(100% of CF)| | NZ$8,500,000| NZ$12,000,000| NZ$15,920,000| 15.

Withholding tax obligate on remitted funds (10%)| | NZ$850,000| NZ$1,200,000| NZ$1,592,000| 16. NZ$ remitted after withholdingTaxes| | NZ$7,650,000| NZ$10,800,000| NZ$14,328,000| 17. Salvage value| | | | NZ$52,000,000| 18. telephone put back rate of NZ$| | $.52| $.54| $.56| 19. Cash flows to parent|! | $3,978,000| $5,832,000| $37,143,680| 20. PV of parent cash flows(20% of staff office out rate)| | $3,315,000| $4,050,000| $21,495,185| 21. Initial investment by parent | -$25,000,000| | | | 22. accumulative NPV of cash flows| | -$21,685,000| -$17,635,000| $3,860,185| Since the overall net present value (NPV) reflects a...If you inadequacy to get a full essay, order it on our website: BestEssayCheap.com

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