Entrepreneurial Finance
6th Edition
ISBN: 9781337635653
Author: Leach
Publisher: Cengage
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Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany
plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared
the following incremental cash flow projects:
I need help to see how I could plug these numbers in my calculator. If you could show me how you found NPV in your calculator.
Transcribed Image Text:Year
Sales (Revenues)
- Cost of Goods Sold (50% of Sales)
- Depreciation
= EBIT
- Taxes (35%)
= unlevered net income
+ Depreciation
+(-) increase/(decrease) in working
capital
- capital expenditures
0
1
2
3
150,000 150,000 150,000
75,000 75,000 75,000
25,000 25,000 25,000
50,000 50,000 50,000
17,500
17,500 17,500
32,500 32,500 32,500
25,000
25,000 25,000
5,000
5,000 -10,000
-90,000
The net present value (NPV) for Epiphany's Project is closest to
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