Module 04 Course Project Template
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barreyuusufbarreModule 04 Course Project Template
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barreyuusufbarreRevenues $ 850,000
Less: Materials $ 95,000
Labor 180,000
Depreciation 60,000
Other 20,000 355,000
Income before Taxes 495,000
Taxes @ 40% 198,000
Net Income $ 297,000
New Production Building 1,100,000
Deprecation Years 10
Required Rate of Return 15%
Net Present Value
Net Income $ 297,000
Add Depreciation 60,000
Annual Cash Flow $ 357,000
Determine the NPV Amount
Cash Flow -1,100,000
$1,791,700
NPV Amount $691,700 165,000
Calculate IRR
Initial Outlay $ 1,791,700
Annual Cash Flow $ 357,000
PV of Annuity Factor 5.02
Reduce Expense
Cash Flow -1,100,000 $ 357,000 $ 357,000 $ 357,000
1 2 3
Required Rate of Return 15%
IRR 30.1%
Calculate PayBack Period
Initial Outlay 1,100,000
Annual Cash flow $ 357,000
Number of Year to Recover initial
Investment 3.08
Calculate Accounting Rate of Return
Average Income $ 297,000
Average Investment 1,100,000
Accounting Rate of Return 27%
Will you invest in the new production facility? Why o
What nonfinancial information will you consider in yo
Reduce Expenses each year
$ 357,000 $ 357,000 $ 357,000 $ 357,000 $ 357,000 $ 357,000 $ 357,000
4 5 6 7 8 9 10
oduction facility? Why or Why Not?