fonderia di torino excel

8/10/2019 Fonderia Di Torino Excel

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ESTIMATE OF VULCAN MOLD-MAKER ANNUAL CASH FLOWS

LABOR COST ($38,170.00) ($39,315.00) ($40,494.00)SEMI AUTO LABOR $0.00 $0.00 $0.00MAINTENANCE ($59,500.00) ($61,285.00) ($63,124.00)FUEL ($26,850.00) ($27,656.00) ($28,485.00)LABOR SAV $5,200.00 $5,356.00 $5,517.00DEPRECIATION ($126,250.00) ($126,250.00) ($126,250.00)PRETAX COSTS ($245,570.00) ($249,150.00) ($252,836.00)TAXES $105,595.00 $107,134.00 $108,720.00AFTER TAX COST ($139,975.00) ($142,016.00) ($144,116.00) + DEPREC $126,250.00 $126,250.00 $126,250.00 - CAP EXPEND ($813,296.00) $0.00 $0.00 $0.00CASH FLOW ($13,725.00) ($15,766.00) ($17,866.00)

ESTIMATE OF SEMI-AUTOMATED MACHINES ANNUAL CASH FLOWS

OPERATING LABOR ($295,546.00) ($304,412.00) ($313,544.00)MAINTEN LABOR ($39,564.00) ($40,751.00) ($41,973.00)MAINTEN SUPP ($4,000.00) ($4,120.00) ($4,244.00)FUEL ($12,300.00) ($12,669.00) ($13,049.00)DEPRECIATION ($47,521.00) ($47,521.00) ($47,521.00)PRETAX COST ($398,931.00) ($409,473.00) ($420,331.00)TAXES $171,540.00 $176,073.00 $180,742.00AFTER TAX COST ($227,391.00) ($233,400.00) ($239,589.00)+DEPRECIATION $47,521.00 $47,521.00 $47,521.00-CAP EXPENDITURE $0.00 $0.00 $0.00CASH FLOW ($179,870.00) ($185,879.00) ($192,068.00)


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($41,709.00) ($42,960.00) ($44,249.00) ($45,576.00) ($46,944.00)$0.00 $0.00 $0.00 $0.00 $0.00

($65,017.00) ($66,968.00) ($68,977.00) ($71,046.00) ($73,177.00)($29,340.00) ($30,220.00) ($31,127.00) ($32,060.00) ($33,022.00)

$5,682.00 $5,853.00 $6,028.00 $6,209.00 $6,395.00($126,250.00) ($126,250.00) ($126,250.00) ($126,250.00) ($126,250.00)($256,634.00) ($260,545.00) ($264,575.00) ($268,723.00) ($272,998.00)$110,353.00 $112,034.00 $113,767.00 $115,551.00 $117,389.00

($146,281.00) ($148,511.00) ($150,808.00) ($153,172.00) ($155,609.00)$126,250.00 $126,250.00 $126,250.00 $126,250.00 $126,250.00

$0.00 $0.00 $0.00 $0.00 $0.00($20,031.00) ($22,261.00) ($24,558.00) ($26,922.00) ($29,359.00)

($322,951.00) ($332,639.00) ($342,618.00) ($352,897.00) ($363,484.00)($43,233.00) ($44,530.00) ($45,866.00) ($47,241.00) ($48,659.00)

($4,371.00) ($4,502.00) ($4,637.00) ($4,776.00) ($4,919.00)($13,441.00) ($13,844.00) ($14,259.00) ($14,687.00) ($15,127.00)($47,521.00) ($47,521.00) ($47,521.00) $0.00

($431,517.00) ($443,036.00) ($454,901.00) ($419,601.00) ($432,189.00)$185,552.00 $190,505.00 $195,607.00 $180,429.00 $185,841.00

($245,965.00) ($252,531.00) ($259,294.00) ($239,172.00) ($246,348.00)$47,521.00 $47,521.00 $47,521.00 $0.00 $0.00

$0.00 $0.00 $0.00 $0.00 $0.00($198,444.00) ($205,010.00) ($211,773.00) ($239,172.00) ($246,348.00)


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QUESTION 2 VULCAN CASH FLOW

0 1 2LABOR COST ($38,170.00) ($38,170.00) ($38,170.00)SEMI AUTO LABOR $0.00 $0.00 $0.00MAINTENANCE ($59,500.00) ($59,500.00) ($59,500.00)FUEL ($26,850.00) ($26,850.00) ($26,850.00)LABOR SAV $5,200.00 $5,200.00 $5,200.00DEPRECIATION ($126,250.00) ($126,250.00) ($126,250.00)PRETAX COSTS ($245,570.00) ($245,570.00) ($245,570.00)TAXES $105,595.00 $105,595.00 $105,595.00AFTER TAX COST ($139,975.00) ($139,975.00) ($139,975.00) + DEPREC $126,250.00 $126,250.00 $126,250.00 - CAP EXPEND ($813,296.00) $0.00 $0.00 $0.00

CASH FLOW ($13,725.00) ($13,725.00) ($13,725.00)

QUESTION 3 SEMI AUTOMATED CASH FLOW

OPERATING LABOR ($295,546.00) ($295,546.00) ($295,546.00)MAINTEN LABOR ($39,564.00) ($39,564.00) ($39,564.00)MAINTEN SUPP ($4,000.00) ($4,000.00) ($4,000.00)FUEL ($12,300.00) ($12,300.00) ($12,300.00)DEPRECIATION ($47,521.00) ($47,521.00) ($47,521.00)PRETAX COST ($398,931.00) ($398,931.00) ($398,931.00)

TAXES $171,540.00 $171,540.00 $171,540.00AFTER TAX COST ($227,391.00) ($227,391.00) ($227,391.00)+DEPRECIATION $47,521.00 $47,521.00 $47,521.00-CAP EXPENDITURE $0.00 $0.00 $0.00CASH FLOW ($179,870.00) ($179,870.00) ($179,870.00)


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6 7 8($38,170.00) ($38,170.00)

$0.00 $0.00($59,500.00) ($59,500.00)($26,850.00) ($26,850.00)

$5,200.00 $5,200.00($126,250.00) ($126,250.00)($245,570.00) ($245,570.00)$105,595.00 $105,595.00

($139,975.00) ($139,975.00)$126,250.00 $126,250.00

$0.00 $0.00

($13,725.00) ($13,725.00)

($295,546.00) ($295,546.00)($39,564.00) ($39,564.00)

($4,000.00) ($4,000.00)($12,300.00) ($12,300.00)

$0.00 $0.00($351,410.00) ($351,410.00)

$151,106.00 $151,106.00($200,304.00) ($200,304.00)

$0.00 $0.00$0.00 $0.00

($200,304.00) ($200,304.00)


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Old Machine New MachineSales 280,000,000 280,000,000Costs 351409.6 119319.6Depreciation 47520 126,250EBIT 279,601,070 279,754,430Tax(43%) 120228460.3 120294405.1Net Income 159,372,610 159,460,025Operating Cash Flow 159,420,130 159,586,275

Machine Costs Old New# employees 24 2wage 7.33 11.36hours 8 8maintenance 188.4 59500# of equivalent employees 3 0wage 7.85 0hours 8 0supplies 4000 0power 12300 26850savings 0 5200

days 210 210costs 351409.6 119319.6

Book ValueCapital Loss= Resale value-Book valueTax Savings=Capital Loss*Tax RateCapital Expenditure= Cost of New Machine-Resale Value of Old machin

CF0 -813298.25CF1 166145CF2 166145

Fonderia Di Torino S.P.A.

CASH FlOWS


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CF3 166145CF4 166145CF5 166145CF6 166145CF7 166145CF8 451270


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Jaimini PatelSarah FitzpatrickJessica Hicks

depreciation for new machine126,250

-166,145

(415807-130682) 285125(130000-285125) 155125

(155125*0.43) 66703.75e-savings in Tax 813296.25

18% 19%

NPV -59976.96 -85397.98IRR 15.84%Profitability Index 0.93 0.89

Discount Rate

The New Machine would save

166,145 per year with thecurrent level of sales. It is apositive Incremental CashFlow.


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Payback Period 4.90

1984 assumption 14%Majority Shareholder assumption 18%

Cost of Equity 12.80%

WACC 9.86%


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17%

-33100.66

0.96


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Risk Free Rate 5.30%Risk Premium 6.00% (Beta) 1.25

Debt Interest Rate 6.80%Tax Rate 43.00%Debt 33.0%Equity 67.0%

Cost of Equity = Rf + ( E(Rm) - Rf )

WACC = Re ( E/(D+E) ) + Rd (D/D+E) )*(1-T)

fonderia di torino excel

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