Conch Republic Electronics, Part 1: Year 1 Year 2 Year 3 Year 4 Year 5
Conch Republic Electronics, Part 1: Year 1 Year 2 Year 3 Year 4 Year 5
Conch Republic Electronics, Part 1: Year 1 Year 2 Year 3 Year 4 Year 5
Equipment $ 43,500,000
Salvage value $ 6,500,000
R&D $ 750,000 sunk cost
Marketing study $ 200,000 sunk cost
Price $ 535
VC $ 220
FC $ 6,400,000
Price of old phone $ 385
Revised price
of old phone $ 215
VC of old phone $ 145
Tax rate 21%
NWC percentage 20%
Required return 12%
VC
New $34,100,000 $36,300,000 $27,500,000 $20,900,000 $16,500,000
Lost sales (4,350,000) (4,350,000)
$29,750,000 $31,950,000 $27,500,000 $20,900,000 $16,500,000
NWC
Beg $0 $12,065,000 $14,155,000 $13,375,000 $10,165,000
End 12,065,000 14,155,000 13,375,000 10,165,000 0
NWC CF ($12,065,000) ($2,090,000) $780,000 $3,210,000 $10,165,000
Salvage
BV of equipment $ 9,704,850
Taxes 673,019
Salvage CF $ 7,173,019
Net CF Time
0 $ (43,500,000)
1 8,338,642
2 25,762,912
3 28,427,962
4 22,935,712
5 31,761,524