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1-What are the relevant cash flows? In the capital budgeting analysis of this project how shall we.. 1 answer below » 1-What are the relevant cash flows? In the capital budgeting analysis of this project how shall we treat: a)the consultant’s market study cost? b)the potential rental value of the unoccupied annex? c)the interest charges? d)working capital? 2-Should we consider the erosion of the existing product-the regular soda-in the analysis?Why or why not? if yes where? 3-By developing a cashflow statement, calculate the project’s NPV,discounted payback period, and net saving per product unit. Document Preview: View complete question » 1-What are the relevant cash flows? In the capital budgeting analysis of this project how shall we treat: a)the consultant’s market study cost? b)the potential rental value of the unoccupied annex? c)the interest charges? d)working capital? 2-Should we consider the erosion of the existing product-the regular soda-in the analysis?Why or why not? if yes where? 3-By developing a cashflow statement, calculate the project’s NPV,discounted payback period, and net saving per product unit. Document Preview: 0
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Cash Flow Statement
Operating Activities
Investiment Activities
Net Cash Flow
Years
Material Cost (peso/liter)
Price / liter / month(peso)
Labour Cost (peso/month)
Energy Cost (peso/month)
Administrative and selling expences (peso/year)
Total Sales (liters / month)
Overhead (1% of total sales/year)
Machine Installation Cost
Survey Cost
Market Study Data
Machine Salvage Value
Erosion (After tax)
Expenses
Material
Principal Payment (16%)
Declining Balance
Working Capitial
Labour
Energy
Administrative
Overhead
Building
Machines
Net Income
CCA
Erosion (after tax)
Land
Building (Annex)
Machines (Install)
Tools
Survey Cost
Disposal Tax Effect
Land
Interest
Survey
Building (Annex)
Machines (Install)
Tools
Other
Financing Activities
Working Capital
Loan @ 20% of needed capital
Loan 16% annual interest
20/80 debt-equity structure
18.2% weight average cost of capital
In Pesos
Income Statement
Revenue
Building
Taxiable Income
Income Taxes (30%)
Net Income Attachments: 727-Cost-Assi….xlsx Q..docx Hola-Kola-Siv….pdf View less » Sep 10 2015 06:27 PM