Project’s Free Cash Flows Assignment
Fantastic Snacks, Inc. is contemplating including a brand new line of cookies and bars to its present product supply. The venture’s life is 7 years. The agency estimates promoting 500Okay packages at a value of $2 per unit the primary 12 months; however this quantity is anticipated to develop at 10% per 12 months over the lifetime of the venture. The value per unit is anticipated to develop at a charge of three% per 12 months. Variable prices are 20% of income and the fastened prices shall be $850Okay per 12 months. The gear required to provide the cookies and bars has an upfront value of$1.4M. It will likely be depreciated utilizing straight-line depreciation over the lifetime of the venture. After seven years, the gear shall be nugatory. No further web working capital is required for this venture. The venture’s low cost charge is 15% and the agency’s marginal tax charge is 35%.
- utilizing excel construct a mannequin to calculate the venture’s free money flows (FCF) and web current worth. Create driver cells that permit the consumer to fluctuate the next inputs: quantity development charge, value per unit development charge, and low cost charge. Get Finance homework help right now