Initial investment cost Savings (from suppliers) Total variable cost Transportation cost New costs Total variable cost Extra cost Salvage value Free cash flow CFCF Year 0 Year 1 Year 2 Year 3 15.65% Year 4 Cost of capital (WACC) Output level per year (cans) Cost per can (supplier) $ Cost per can (manufacturing) $ Transportation cost $ 12,000.00 Salvage value per machine $ 3,000.00 Currently the supplier charges the company $1.50 per 300,000 1.50 Year 5 1.20
Initial investment cost Savings (from suppliers) Total variable cost Transportation cost New costs Total variable cost Extra cost Salvage value Free cash flow CFCF Year 0 Year 1 Year 2 Year 3 15.65% Year 4 Cost of capital (WACC) Output level per year (cans) Cost per can (supplier) $ Cost per can (manufacturing) $ Transportation cost $ 12,000.00 Salvage value per machine $ 3,000.00 Currently the supplier charges the company $1.50 per 300,000 1.50 Year 5 1.20
Chapter1: Financial Statements And Business Decisions
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