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Financial Analysis of Investment Options

The document presents financial data comparing two machines, A and B, including cost savings, depreciation, EBIT, tax costs, and net cash flows. It calculates the net present value (NPV) for both machines, showing that Machine B has a higher NPV. Additionally, the document includes details on operating cash flows and investment cash flows for both machines over multiple years.

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Nguyễn Thanh Trúc
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11 views11 pages

Financial Analysis of Investment Options

The document presents financial data comparing two machines, A and B, including cost savings, depreciation, EBIT, tax costs, and net cash flows. It calculates the net present value (NPV) for both machines, showing that Machine B has a higher NPV. Additionally, the document includes details on operating cash flows and investment cash flows for both machines over multiple years.

Uploaded by

Nguyễn Thanh Trúc
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

0 1 2

Cost Savings 270,000.0 270,000.0


Dep 128,000.0 204,800.0
EBIT 142,000.0 65,200.0
T 49,700.0 22,820.0
OEAT = EBIT (1-T) 92,300.0 42,380.0
OCF 220,300.0 247,180.0
Inc. NWC -20000 (3,500.0) (3,500.0)
INV (640,000.0)
Salvage value
TAX on Salvage
NCF (660,000.0) 216,800.0 243,680.0
NPV 49,908.03

Dep rate 640000 0.2 0.32


640000 128000 204800
3 4
270,000.0 270,000.0
122,880.0 73,728.0
147,120.0 196,272.0
51,492.0 68,695.2
95,628.0 127,576.8
218,508.0 201,304.8
(3,500.0) 30,500.0

70,000.0
14,207.2
215,008.0 316,012.0 -

0.192 0.1152 0.1152 0.0576 BV 110592


122880 73728 73728 36864
110592
0 1 2
at c SAVINGS 175,500.0 175,500.0
Dep tax shield 44,800.0 71,680.0
Salvage
Tax
NWC -20000 (3,500.0) (3,500.0)
INV -640000
NCF (660,000.0) 216,800.0 243,680.0
3 4
175,500.0 175,500.0
43,008.0 25,804.8
70,000.0
14,207.2
(3,500.0) 30,500.0

215,008.0 316,012.0
A EAC (A) B EAC(B)
0 4000 1000
1 100EAC1 500EAC2
2 100EAC1 500EAC2
3 100EAC1 500EAC2
4 100EAC1 500EAC2
5 100EAC1 500EAC2
6 100EAC1
7 100EAC1
8 100EAC1
9 100EAC1
10 100EAC1
NPV $4,614.46 $2,895.39
NPV ==> Machine 2 because PV of Cost is
e PV of Cost is lower
YEAR - 1.00
MACHINE A (1,980,000.00)
DEPRECIATION 330,000.00
SALES 12,400,000.00
VARIABLE COST 4,340,000.00
FIXED COST 187,000.00
EBIT 7,543,000.00
TAX COST 1,584,030.00
INVESTINNG CF (1,980,000.00) -
OPORATING CF 6,288,970.00
NET CF (1,980,000.00) 6,288,970.00
MACHINE B (5,400,000.00)
DEPRECIATION 600,000.00
SALES 12,400,000.00
VARIABLE COST 3,720,000.00
FIXED COST 145,000.00
EBIT 7,935,000.00
TAX COST 1,666,350.00
INVESTINNG CF (5,400,000.00)
OPORATING CF 6,868,650.00
NET CF (5,400,000.00) 6,868,650.00
2.00 3.00 4.00 5.00 6.00

330,000.00 330,000.00 330,000.00 330,000.00 330,000.00


12,400,000.00 12,400,000.00 12,400,000.00 12,400,000.00 12,400,000.00
4,340,000.00 4,340,000.00 4,340,000.00 4,340,000.00 4,340,000.00
187,000.00 187,000.00 187,000.00 187,000.00 187,000.00
7,543,000.00 7,543,000.00 7,543,000.00 7,543,000.00 7,543,000.00
1,584,030.00 1,584,030.00 1,584,030.00 1,584,030.00 1,584,030.00
- - - - -
6,288,970.00 6,288,970.00 6,288,970.00 6,288,970.00 6,288,970.00
6,288,970.00 6,288,970.00 6,288,970.00 6,288,970.00 6,288,970.00

600,000.00 600,000.00 600,000.00 600,000.00 600,000.00


12,400,000.00 12,400,000.00 12,400,000.00 12,400,000.00 12,400,000.00
3,720,000.00 3,720,000.00 3,720,000.00 3,720,000.00 3,720,000.00
145,000.00 145,000.00 145,000.00 145,000.00 145,000.00
7,935,000.00 7,935,000.00 7,935,000.00 7,935,000.00 7,935,000.00
1,666,350.00 1,666,350.00 1,666,350.00 1,666,350.00 1,666,350.00

6,868,650.00 6,868,650.00 6,868,650.00 6,868,650.00 6,868,650.00


6,868,650.00 6,868,650.00 6,868,650.00 6,868,650.00 6,868,650.00
COMPARE
NPV
EACF

7.00 8.00 9.00

25,410,103.88

600,000.00 600,000.00 600,000.00


12,400,000.00 12,400,000.00 12,400,000.00
3,720,000.00 3,720,000.00 3,720,000.00
145,000.00 145,000.00 145,000.00
7,935,000.00 7,935,000.00 7,935,000.00
1,666,350.00 1,666,350.00 1,666,350.00

6,868,650.00 6,868,650.00 6,868,650.00


6,868,650.00 6,868,650.00 6,868,650.00 34,156,718.94
A B RESULT
25,410,103.88 34,156,718.94 B
5,834,347.39 5,930,991.09 B

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