Data

           

CCA Rate

60,00%

$B$5

       

Cost of Capital

12,00%

$B$6

       

Tax Rate

40,00%

$B$7

       
             
 

Shoe Fabrik Inc.

             
           

PV

     

40%

 

12%

of

     

Tax

After Tax

Interest

Cash

Item

Years

Amount

Effect

Cash Flow

Factor

Flow

Cost of new Machine

0

-140.000

 

=C15

=(1+$B$6)^-B15

=E15*F15

 

 

 

 

-140.000

1,00

-140.000

Proceeds from Old Machine

0

35.000

 

35.000

1,00

35.000

Operating Cost Savings through

5

30.000

60,00%

18.000

3,60

64.886

Difference in Salvage

5

10.000

 

10.000

0,57

5.674

Present Value of Tax Shield

 

 

 

 

 

31.234

Net Present Value (neg. do not invest)

     

-€ 3.206,18

             

^'=(((-C15-C17)*B5*B7)/(B5+B6))*((1+0,5*B6)/(1+B6))-(C19*B5*B7)/(B5+B6)*1/(1+B6)^B19