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VIEWS: 38 PAGES: 45

  • pg 1
									Present Value
Single Sum      Future Worth       Interest       Periods          PW                 Total PW
P/F                            0        0.00%                  0               0.00
                               0        0.00%                  0               0.00
                               0        0.00%                  0               0.00
                               0        0.00%                  0               0.00
F/P             PW                    Periods
                                   Interest      FW                                   Total FW
                         3,000        10.00%  35    84,307.31
                        40000         10.00%  35 1,124,097.47
                             0          0.00%  0          0.00
                             0          0.00%  0          0.00
P/A           Period Amt A            Periods
                                   Interest      PW                                   Total PW
                             0          0.00%  0          0.00
                             0          0.00%  0          0.00
                             0          0.00%  0          0.00
                             0          0.00%  0          0.00
F/A           Period Amt A            Periods
                                   Interest      FW                                   Total FW
                            70        10.00%  35    18,971.71
                           120        10.00%  35    32,522.92
                       10,000         10.00%  35 2,710,243.68
                             0          0.00%  0          0.00
 Combined A and F Cash Flows
              Period Amt A Interest Periods      F1                                   N1             F2
                         1,000  8.00%          9        -1000                                    1         -1000

                                                                   Interest           Period         Factor
                                                  A/P Factor                  8.00%              8      0.17401
                                                  A/F                         8.00%              8      0.09401

                                                      Arithmetic Gradient
                                                              Interest       Periods                 P/G
                                                                       6.00%                     5         7.9345

                                                      Geometric Gradient
                                                             Interest       Periods                Gradient %
                                                                      6.00%                      5       5.00%

Interest        Periods            A              n for A          PV                 FV   Interest
                             20            0.00                0     6,000.00    50,000.00      11.18%
Periods         Interest           A              n for A        PV           FV           Periods
                           8.00%       8,000.00                4    26,497.01 100,000.00          17.26

                                   Search
F wanted       n for F       A         n for A                     Interest        FV Calc
    100,000.00         17.258 8,000.00                         4              8.00% 100,005.55
N2             PW
          2     4,463.62

               P or F   A
A/P            2,000,000 348029.5
A/F            2,000,000 188029.5


A/G
      1.8836


P/G
        4.63
Interest            6.80%      Period          17   IRR with Solver
Period          15,779.98 PW   FW       48,285.61   Period
            0      500.00      Period          10            0 -27,000.00
            1      640.00      AW        2,225.99            1 1,019.00
            2      780.00                                    2 2,019.00
            3      920.00                                    3 2,499.20
            4    1,060.00                                    4 4,019.00
            5    1,200.00                                    5 5,019.00
            6    1,340.00                                    6 6,019.00
            7    1,480.00                                    7 7,019.00
            8    1,620.00                                    8 8,019.00
            9    1,760.00                                    9 7,497.60
           10    1,900.00                                   10        0.00
           11    2,040.00                                   11        0.00
           12    2,180.00                                   12        0.00
           13    2,320.00                                   13        0.00
           14    2,460.00                                   14        0.00
           15    2,600.00                                   15        0.00
           16    2,740.00                                   16        0.00
           17    2,880.00                                   17        0.00
           18         0.00                                  18        0.00
           19         0.00                                  19        0.00
           20         0.00                                  20        0.00
           21         0.00                                  21        0.00
           22         0.00                                  22        0.00
           23         0.00                                  23        0.00
           24         0.00                                  24        0.00
           25         0.00                                  25        0.00
           26         0.00                                  26        0.00
           27         0.00                                  27        0.00
           28         0.00                                  28        0.00
           29         0.00                                  29        0.00
           30         0.00                                  30        0.00
           31         0.00                                  31        0.00
           32         0.00                                  32        0.00
           33         0.00                                  33        0.00
           34         0.00                                  34        0.00
           35         0.00                                  35        0.00
                                                    IRR             8.00%
Test Score Weight Weighted    Extra
 1 96.000 0.167    16.000    0.000
 2 87.000 0.167    14.500    0.000
 3 78.000 0.167    13.000    10.000
 4 100.000 0.167   16.667    10.000
 5 100.000 0.250   25.000    10.000
 6 57.037 0.090     7.833    0.000
 ENGR ECON AVERAGE 93.000
Nominal per Period          0.55%         Nominal per Year                     8.35%
Periods per Year               12         Compound Periods per Year                4
Nominal per Year            6.60%         Effective Interest Rate              8.62%
Effective per Year          6.80%

Effective Sub Periods Sub Periodic   or   Sub Periodic Sub Periods Effective
   10.00%          365     0.026%                 1.53%           4   6.262%
Options         A                B              C             D                      Interest
Salvage               1,600.00         2,200.00      1,800.00             2,400.00        5.50%
Salvage Life                 3                4             5                    4
            0        -8,000.00        -9,500.00    -11,000.00           -12,000.00
            1        -3,500.00        -3,300.00     -3,000.00            -2,200.00
            2        -3,500.00        -3,300.00     -3,000.00            -2,200.00
            3        -3,500.00        -3,300.00     -3,000.00            -2,200.00
            4             0.00        -3,300.00     -3,000.00            -2,200.00
            5             0.00             0.00     -3,000.00                 0.00
            6             0.00             0.00          0.00                 0.00
            7             0.00             0.00          0.00                 0.00
            8             0.00             0.00          0.00                 0.00
            9             0.00             0.00          0.00                 0.00
           10             0.00             0.00          0.00                 0.00
PW/PWC              -16,080.18       -19,291.12    -22,433.61           -17,774.01
NAW/AWC              -5,960.19        -5,503.65     -5,253.42            -5,070.83
FW/FWC              -18,882.02       -23,898.31    -29,319.83           -22,018.88
                                       DO NOT TOUCH

Options         A                B                C                 D                Interest
Salvage               1,600.00         2,400.00          3,800.00             0.00      16.00%
Salvage Life                 4                5                 7                0
            0       -15,000.00       -21,000.00        -28,000.00             0.00
            1        -8,000.00        -6,000.00         -4,600.00             0.00
            2        -8,400.00        -6,500.00         -4,840.00             0.00
            3        -8,800.00        -7,000.00         -5,080.00             0.00
            4        -7,600.00        -7,500.00         -5,320.00             0.00
            5             0.00        -5,600.00         -5,560.00             0.00
            6             0.00             0.00         -5,800.00             0.00
            7             0.00             0.00         -2,240.00             0.00
            8             0.00             0.00              0.00             0.00
            9             0.00             0.00              0.00             0.00
           10             0.00             0.00              0.00             0.00
PW/PWC              -37,974.32       -42,295.99        -47,575.49             0.00
NAW/AWC             -13,571.08       -12,917.59        -11,780.29       #DIV/0!
FW/FWC              -68,757.80       -88,836.03       -134,458.78             0.00
              A             B         Interest                 A             B         C
 Purchase         25,000.00 12,000.00    12.00%    Purchase        14,000.00 26,000.00 29,500.00
 Annual OC         4,000.00       900             Annual OC         6,000.00 5,500.00    5,000.00
  Salvage          3,000.00 2,500.00                Salvage         2,000.00 3,500.00    4,500.00
    Life                  5         6                 Life                 5        10         10
  Period                                            Interest           6.00%     6.00%      6.00%
          0        25,000.00    12,000            NAW/AWC           8,968.76 8,767.03    8,666.70
          1         4,000.00       900             PW/PWC          66,010.83 64,526.10 63,787.66
          2         4,400.00       900                               DO NOT TOUCH
          3         4,800.00       900
          4         5,200.00       900                         A            B            C
          5         5,600.00       900             Purchase        14,000.00 26,000.00       29,500.00
          6             0.00 10,400.00            Annual OC         6,000.00 5,500.00         5,000.00
          7             0.00       900              Salvage         2,000.00 3,500.00         4,500.00
          8             0.00       900                Life                 5        10              10
PW                 41,977.91 21,283.87              Interest           6.00%     6.00%           6.00%
NAW/AWC           11,645.08 5,176.78              NAW/AWC           8,968.76 8,767.03         8,666.70
                                                   PW/PWC          66,010.83 64,526.10       63,787.66
Year      Amount
        0 -$18,000.00   Bond Face Value                       25,000.00
        1 $1,853.63     Bond Interest Rate                        7.20%
        2 $1,853.63     Bond Interest/half year                $900.00
        3 $1,853.63     FV (or PW) of bond interest/year     $1,853.63
        4 $1,853.63                    Beware of PV vs. FV
        5 $1,853.63
        6 $1,853.63
        7 $1,853.63
        8 $1,853.63
        9 $1,853.63
       10 $1,853.63
       11 $1,853.63
       12 $26,853.63
ROR          11.917%
Single Sum ROR Calculation
PV           -10,000 FV          18,000 n   6 ROR         10.29%
                                                          10.29%
Single Sum & Uniform Amount ROR
PV            -10,000 FV        18,000 n    6 A uniform    1,000 ROR   18.39%

General Pattern Cash Flow ROR
Period     A          B        C
         0 -110,000          0         0
         1    19,000         0         0
         2    19,000     4,000     4,000
         3    19,000     4,000     4,000
         4    19,000     4,000     4,000
         5    19,000     4,000     4,000
         6    19,000     4,000     4,000
         7    19,000     4,000     4,000
         8    19,000 104,000 104,000
         9    19,000
       10     25,500
       11
       12
       13
       14
       15
           ROR        ROR      ROR
              11.88% #NUM! #NUM!
  Incremental ROR
          A          B                    C
P           -14,000    -26,000              -29,500
A             -6,000    -5,500               -5,000
n                  5        10                    10
MARR          6.00%      6.00%                6.00%
Period                         B-A                   C-A
        0   -14,000    -26,000    -12,000   -29,500     -15,500
        1     -6,000    -5,500        500    -5,000       1,000
        2     -6,000    -5,500        500    -5,000       1,000
        3     -6,000    -5,500        500    -5,000       1,000
        4     -6,000    -5,500        500    -5,000       1,000
        5   -18,000     -5,500     12,500    -5,000      13,000
        6     -6,000    -5,500        500    -5,000       1,000
        7     -6,000    -5,500        500    -5,000       1,000
        8     -6,000    -5,500        500    -5,000       1,000
        9     -6,000    -5,500        500    -5,000       1,000
       10     -4,000    -2,000      2,000       -500      3,500
       11                               0                     0
       12                               0                     0
       13                               0                     0
       14                               0                     0
       15                               0                     0
                     ROR            8.37% ROR             8.69%
C-B
      -3,500
         500
         500
         500
         500
         500
         500
         500
         500
         500
       1,500
           0
           0
           0
           0
           0
      9.75%
Interest Rate         12.00%                Note: make sure that AO Cashflow after life of project is a large negative number!!
First Cost             7,000

Defender            Market
Year                Value     AO Cashflow Capital Recovery AW of AOC         Total AW
                1       3,500       -16,000           -4,340         -16,000 -20,340                  1
                2         100       -20,000           -4,095         -17,887 -21,982                  2
                3           0      -100,000           -2,914         -42,221 -45,135                  3
                4           0      -100,000           -2,305         -54,310 -56,615                  4
                5           0      -100,000           -1,942         -61,502 -63,444                  5
                6           0      -100,000           -1,703         -66,246 -67,949                  6
                7           0      -100,000           -1,534         -69,592 -71,126                  7
                8           0      -100,000           -1,409         -72,064 -73,473                  8
                                                             Least Cost AW      -20,340
                                                             Economic Service Life                    1
project is a large negative number!!!!                       Interest Rate          12.00%
                                                             First Cost             21,000

                                    Challenger       Market
                                    Year             Value AO Cashflow Capital Recovery AW of AOC         Total AW
                                                 1    13,000     -11,000          -10,520         -11,000 -21,520
                                                 2     7,000     -13,000           -9,124         -11,943 -21,067
                                                 3         0     -19,000           -8,743         -14,035 -22,778
                                                 4         0    -100,000           -6,914         -32,022 -38,935
                                                 5         0    -100,000           -5,826         -42,722 -48,548
                                                 6         0    -100,000           -5,108         -49,780 -54,888
                                                 7         0    -100,000           -4,601         -54,758 -59,359
                                                 8         0    -100,000           -4,227         -58,436 -62,663
                                                                                          Least Cost AW      -21,067
                                                                                          Economic Service Life
1
2
3
4
5
6
7
8

2
Depreciation                                                                                   Not the initial cost, it is the
Straight Line   Price (Cost)         69,000 Salvage                0 Life (n)                6 Depends on whether or not
                Depreciation         11,500                                                    Depreciation outside of Life

Declining Balance              Price (Cost)       80,000 Salvage          12,000 Life (n)                10

                Period                        1        2           3            4            5            6

                Depreciation    $16,000.00 $12,800.00 $10,240.00 $8,192.00 $6,553.60 $5,242.88
                Sum             $53,785.60

Sum of Years Digits            Price (Cost)       50,000 Salvage                0 Life (n)                6

                Period                        1        2           3            4            5            6

                Depreciation    $14,285.71 $11,904.76      $9,523.81 $7,142.86 $4,761.90 $2,380.95
                Sum             $50,000.00

MACRS Tax Depreciation         Price (Cost)       45,000 Salvage               0 Life (N)                 8
             Period                       1            2            3          4
3 years      Depr %                  33.33%       44.45%      14.81%       7.41%
             Depr Amt                14,999       20,003        6,665      3,335

                Period                    1            2           3          4            5             6
5 years         Depr %               20.00%       32.00%      19.20%     11.52%       11.52%         5.76%
                Depr Amt              9,000       14,400       8,640      5,184        5,184         2,592

                Period                    1            2           3          4             5            6
7 years         Depr %               14.29%       24.49%      17.49%     12.49%         8.93%        8.92%
                Depr Amt              6,431       11,021       7,871      5,621         4,019        4,014

                Period                    1            2           3          4             5            6
10 years        Depr %               10.00%       18.00%      14.40%     11.52%         9.22%        7.37%
                Depr Amt              4,500        8,100       6,480      5,184         4,149        3,317

                Period                    1            2           3           4            5            6
15 years        Depr %                5.00%        9.50%       8.55%       7.70%        6.93%        6.23%
                Depr Amt              2,250        4,275       3,848       3,465        3,119        2,804

                Period                    1            2           3           4            5            6
20 years        Depr %                3.75%        7.22%       6.68%       6.18%        5.71%        5.29%
                Depr Amt              1,688        3,249       3,006       2,781        2,570        2,381
Not the initial cost, it is the purchase price
Depends on whether or not it is at the beginning of a year or at the end of the year (which includes depreciation of that year)
Depreciation outside of Life is 0




                       7           8               9          10

             $4,194.30 $3,355.44           $1,421.77      $0.00




                       7           8               9          10

              #NUM!        #NUM!          #NUM!        #NUM!




                                       p.546 & p.542




                      7           8
                  8.93%       4.46%
                  4,019       2,007

                      7           8                9         10          11
                  6.55%       6.55%            6.56%      6.55%       3.28%
                  2,948       2,948            2,952      2,948       1,476

                      7           8                9         10          11         12          13          14         15
                  5.90%       5.90%            5.91%      5.90%       5.91%      5.90%       5.91%       5.90%      5.91%
                  2,655       2,655            2,660      2,655       2,660      2,655       2,660       2,655      2,660

                      7           8                9         10          11         12          13          14         15
                  4.89%       4.52%            4.46%      4.46%       4.46%      4.46%       4.46%       4.46%      4.46%
                  2,201       2,034            2,007      2,007       2,007      2,007       2,007       2,007      2,007
on of that year)




                      16
                   2.95%
                   1,328

                      16      17      18      19      20      21
                   4.46%   4.46%   4.46%   4.46%   4.46%   2.23%
                   2,007   2,007   2,007   2,007   2,007   1,004
                                        State Taxes             Fed Taxes
                              State Tax          7.50%              31.00%
Period Revenues     Expenses Depr %     State Income State Tax Depr %      Fed Income Fed Tax
      0                    10
      1         2           1    20.00%              -1  -0.075     20.00%        -0.925  -0.287
      2         2           1    20.00%              -1  -0.075     32.00%        -2.125  -0.659
      3         2           1    20.00%              -1  -0.075     19.20%        -0.845  -0.262
      4         2           1    20.00%              -1  -0.075     11.52%        -0.077  -0.024
      5         2           1    20.00%              -1  -0.075     11.52%        -0.077  -0.024
      6         2           1     0.00%               1   0.075      5.76%         0.349   0.108
      7         2           1     0.00%               1   0.075      0.00%         0.925   0.287
      8         2           1     0.00%               1   0.075      0.00%         0.925   0.287
      9         2           1     0.00%               1   0.075      0.00%         0.925   0.287
     10         2           1     0.00%               1   0.075      0.00%         0.925   0.287

                                                  DO NOT TOUCH!
                                                                          MARR              14%
                                                            State Taxes
Total Cash Flow                                   State Tax          0.00%
Taxes After Tax     Period Revenues     Expenses Depr %     State Income State Tax
           -10.00         0                40,000
 -0.36       1.36         1    20,000           0     0.00%      20,000.00         0
 -0.73       1.73         2    24,000           0     0.00%      24,000.00         0
 -0.34       1.34         3         0           0     0.00%            0.00        0
 -0.10       1.10         4         0           0     0.00%            0.00        0
 -0.10       1.10         5         0           0     0.00%            0.00        0
  0.18       0.82         6         0           0     0.00%            0.00        0
  0.36       0.64         7         0           0     0.00%            0.00        0
  0.36       0.64         8         0           0     0.00%            0.00        0
  0.36       0.64         9         0           0     0.00%            0.00        0
  0.36       0.64        10         0           0     0.00%            0.00        0
ROR       0.000%
                                                                        Use for Examples
PW         -$4.98
           Fed Taxes
                0.00%                               Total          Cash Flow
           Depr %     Fed Income        Fed Tax     Taxes          After Tax
                                                                    -40,000.00
                  0.00%     20,000.00        0.00           0.00     20,000.00
                  0.00%     24,000.00        0.00           0.00     24,000.00
                  0.00%          0.00        0.00           0.00           0.00
                  0.00%          0.00        0.00           0.00           0.00
                  0.00%          0.00        0.00           0.00           0.00
                  0.00%          0.00        0.00           0.00           0.00
                  0.00%          0.00        0.00           0.00           0.00
                  0.00%          0.00        0.00           0.00           0.00
                  0.00%          0.00        0.00           0.00           0.00
                  0.00%          0.00        0.00           0.00           0.00
                                                    ROR                6.394%
se for Examples
                          MARR               14% PW                 -$3,988.92
                         Downpayment            Rate      Term      State Taxes                    Fed Taxes
                                    2 State Tax   12.00%          5          7.50%                     31.00%
Period        Revenues Expenses       Depr %    Interest Principal State Income          State Tax Depr %
          0                        10
          1          2              1    20.00%     0.960     1.259           -1.96          -0.147   20.00%
          2          2              1    20.00%     0.809     1.410           -1.81       -0.13567    32.00%
          3          2              1    20.00%     0.640     1.580           -1.64       -0.12297    19.20%
          4          2              1    20.00%     0.450     1.769           -1.45       -0.10876    11.52%
          5          2              1    20.00%     0.238     1.981           -1.24       -0.09283    11.52%
          6          2              1     0.00%     0.000     0.000            1.00           0.075    5.76%
          7          2              1     0.00%     0.000     0.000            1.00           0.075    0.00%
          8          2              1     0.00%     0.000     0.000            1.00           0.075    0.00%
          9          2              1     0.00%     0.000     0.000            1.00           0.075    0.00%
         10          2              1     0.00%     0.000     0.000            1.00           0.075    0.00%

                                                                                 DO NOT TOUCH!

R             E          D                 T       t           NIBT       NIAT           ATCF
          0          0                 0       0       0.00%          0              0           0         Input
R             E          D                 T       t           NIBT       NIAT           ATCF
                                                                      0              0           0       Unknown
                                                Cash Flow After Tax
   Fed Income      Fed Tax Total Taxes Paid             CFAT            Period        Revenues
                                                                   -2             0
          -1.813     -0.562            -0.709                  -0.510             1      70,000
          -2.873     -0.891            -1.026                  -0.193             2      70,000
          -1.437     -0.445            -0.568                  -0.651             3      70,000
          -0.493     -0.153            -0.262                  -0.958             4      70,000
          -0.297     -0.092            -0.185                  -1.034             5      90,000
           0.349      0.108             0.183                   0.817             6           0
           0.925      0.287             0.362                   0.638             7           0
           0.925      0.287             0.362                   0.638             8           0
           0.925      0.287             0.362                   0.638             9           0
           0.925      0.287             0.362                   0.638            10           0
                              ROR                            -7.920%




 Input

Unknown
Downpayment                 Rate       Term      State Taxes            Fed Taxes
         20,000 State Tax        8.00%         4         35.00%              0.00%
Expenses        Depr %      Interest Principal   State Income State Tax Depr %     Fed Income
        100,000
         36,000    33.33%   6,400.000   17,753.664    -5730.00  -2005.5    20.00%     9,605.50
         41,000    44.45%   4,979.707   19,173.958   -20429.71  -7150.4    32.00%      -829.31
         46,000    14.81%   3,445.790   20,707.874     5744.21 2010.473    19.20%      -656.26
         51,000     7.41%   1,789.160   22,364.504     9800.84 3430.294    11.52%     2,260.55
         56,000     0.00%       0.000        0.000    34000.00   11900     11.52%    10,580.00
              0     0.00%       0.000        0.000        0.00        0     0.00%         0.00
              0     0.00%       0.000        0.000        0.00        0     0.00%         0.00
              0     0.00%       0.000        0.000        0.00        0     0.00%         0.00
              0     0.00%       0.000        0.000        0.00        0     0.00%         0.00
              0     0.00%       0.000        0.000        0.00        0     0.00%         0.00

                                                      Use for Examples
                                 Cash Flow After Tax
Fed Tax      Total Taxes Paid            CFAT
                                            -20,000.00
      0.00           -2,005.50               11,851.84
      0.00           -7,150.40               11,996.73
      0.00            2,010.47               -2,164.14
      0.00            3,430.29               -8,583.96
      0.00           11,900.00               22,100.00
      0.00                0.00                     0.00
      0.00                0.00                     0.00
      0.00                0.00                     0.00
      0.00                0.00                     0.00
      0.00                0.00                     0.00
             ROR                              24.369%
Benefit Cost Spreadsheet
           Interest Rate          6.00%
First Cost         60,000                                                              First Cost
           Period          Costs         Benefits    Disbenefits
                         1       10,000       32,340                  0
                         2       10,000       32,340                  0
                         3       10,000       32,340                  0
                         4             0           0                  0
                         5             0           0                  0
                         6             0           0                  0
                         7             0           0                  0
                         8             0           0                  0
                         9             0           0                  0
                       10              0           0                  0
           PW                 26,730.12 86,445.21                  0.00
                           Traditional B/C                      0.9967
                           Modified B/C                         0.9953

Damage              150,000 Probability      1.00000 Annual Damage       150,000.00
I                     6.00% Capital                                   Damage           Annual
N                        30 Costs         AW Capital Operating        Reduction        Benefit
Option     A                     800,000 58,119.13             87,000        53.33%      80,000.00
           B                            0        0.00        -100,000        80.00%     120,000.00
           C                   1,450,000 105,340.92             5,000        86.67%     130,000.00

                                     Accept Lowest Capital Cost First and then Change based on Incremental
Incremental B/C                                                           Annual Costs
Delta     B vs. A                -800,000     -58,119           -187,000        -245,119     40,000
          C vs. B               1,450,000     105,341            105,000         210,341     10,000

Acceptance Criteria
        1 Costs             +             Benefits                        Ratio        >=1
        2 Costs             -             Benefits     +                  Ratio
        3 Costs             -             Benefits     -                  Ratio        <=1
                                                                                 Incremental B/C
           Interest Rate          6.00%                                          Delta First
                1,000,000                                                            940,000 Delta             Delta
           Period          Costs         Benefits    Disbenefits                 Period        Costs           Benefits
                         1       20,000       70,000             0                           1         10,000        37,660
                         2             0           0             0                           2        -10,000       -32,340
                         3             0           0             0                           3        -10,000       -32,340
                         4             0           0             0                           4               0            0
                         5             0           0             0                           5               0            0
                         6             0           0             0                           6               0            0
                         7             0           0             0                           7               0            0
                         8             0           0             0                           8               0            0
                         9             0           0             0                           9               0            0
                       10              0           0             0                         10                0            0
           PW                 18,867.92 66,037.74             0.00               PW                 -7,862.19 -20,407.47
                           Traditional B/C                 0.0648                              Traditional B/C
                           Modified B/C                    0.0472                              Modified B/C


           Annual          Traditional Modified                      Permanent               First Cost        Costs
           Disbenefit      B/C          B/C                                                                0       105,000
               25,000.00        0.37900     -0.55059
                      0.00     -1.20000 #DIV/0!
                      0.00      1.17817      1.18662

ed on Incremental

                    -25,000   -0.26518     -4.33592
                          0    0.04754     -0.90183
Delta
Disbenefits
            0
            0
            0
            0
            0
            0
            0
            0
            0
            0
         0.00
     -0.0219
     -0.0133


Benefits    Interest    B/C Ratio
    290,000        6.00% #DIV/0!
Volume        12,000 cars/day
Opportunity Cost         $0.60 per min

Location   Type
Main       Benefit   # of Cars    Time Saved    Conversion      Total
                           2000            20    0.016666667              400
Exit       Benefit   # of Cars    Time Saved    Conversion      Total
                           2000            24    0.016666667              480
Main       Cost      # of Cars    Time Saved    Conversion      Total
                           5000    29.6052632    0.016666667            -1,480
Main       Cost      # of Cars    Time Saved    Conversion      Total
                           5000    8.42105263    0.016666667              -421
                                                Project Total           -1,021
Find the Real Rate of Return
           Market      Inflation     Real i
                5.50%          2.75%        2.68%

Find the Real Rate of Return
           Market      Real i       Inflation
                5.25%         1.94%         3.25%

Find the Market or Nomincal Rate
           Real i     Inflation     Market
               8.00%          6.00%     14.48%
Use P/F Templates as necessary

Inflation           6.00% Tax Rate          34.00%
Period          Fixed OC Inflation OC Tax Income Taxes      ATCF      ATCF w/o Inflation
            0        1,500        2,000      -3,500  -1,190    -2,310                -2,310
            1        1,500        2,120      -3,620  -1,231    -2,389                -2,310
            2        1,500        2,247      -3,747  -1,274    -2,473                -2,310
            3        1,500        2,382      -3,882  -1,320    -2,562                -2,310
            4        1,500        2,525      -4,025  -1,368    -2,656                -2,310
            5        1,500        2,676      -4,176  -1,420    -2,756                -2,310

      -2,250
      -2,300 0              2          4         6          8

      -2,350
      -2,400
      -2,450
      -2,500                                                         ATCF w/o Inflation
      -2,550                                                         ATCF
      -2,600
      -2,650
      -2,700
      -2,750
      -2,800
                      Downpayment                     Rate       Term        State Taxes
                                5,000 State Tax           18.00%           3         31.00%
Period Revenues       Expenses        Depr %          Interest   Principal   State Income State Tax
      0                        50,000
      1     100,000            63,000        33.33%    8,100.000 12,596.574       12235.00     3792.85
      2     102,500            67,095        44.45%    5,832.617 14,863.957        7347.38 2277.688814
      3     105,063            71,472        14.81%    3,157.104 17,539.469       23028.47 7138.825865
      4     107,689            76,151         7.41%        0.000      0.000       27832.68 8628.130374
      5           0                 0         0.00%        0.000      0.000           0.00           0
      6           0                 0         0.00%        0.000      0.000           0.00           0
      7           0                 0         0.00%        0.000      0.000           0.00           0
      8           0                 0         0.00%        0.000      0.000           0.00           0
      9           0                 0         0.00%        0.000      0.000           0.00           0
     10           0                 0         0.00%        0.000      0.000           0.00           0

                                                                              Use for Examples
         Revenues     Consumables    Labor        Total Cost
                2.50%          9.00%        5.50%
     1        100,000         18,000       45,000     63,000
     2        102,500         19,620       47,475     67,095
     3        105,063         21,386       50,086     71,472
     4        107,689         23,311       52,841     76,151
     5              0              0            0            0
     6              0              0            0            0
     7              0              0            0            0
     8              0              0            0            0
     9              0              0            0            0
    10              0              0            0            0
Fed Taxes
    0.00%                                   Cash Flow After Tax
Depr %    Fed IncomeFed Tax     Total Taxes Paid    CFAT
                                                        -5,000.00
   0.00%   25,107.15     0.00     3,792.85              12,510.58
   0.00%   27,294.69     0.00     2,277.69              12,430.74
   0.00%   23,294.64     0.00     7,138.83               5,755.18
   0.00%   22,909.55     0.00     8,628.13              22,909.55
   0.00%        0.00     0.00          0.00                   0.00
   0.00%        0.00     0.00          0.00                   0.00
   0.00%        0.00     0.00          0.00                   0.00
   0.00%        0.00     0.00          0.00                   0.00
   0.00%        0.00     0.00          0.00                   0.00
   0.00%        0.00     0.00          0.00                   0.00
                                ROR                     243.609%
P        S        A        I            n   PW           ROR       S        % Delta From Base     S        ROR
40,000    2,000   20,000       10.00%   2    -3,636.36     3.26%    2,000                 0.00%    2,000     3.26%
40,000    3,000   20,000       10.00%   2    -2,809.92     4.84%    3,000                50.00%    3,000     4.84%
40,000    4,000   20,000       10.00%   2    -1,983.47     6.39%    4,000               100.00%    4,000     6.39%
40,000    5,000   20,000       10.00%   2    -1,157.02     7.92%    5,000               150.00%    5,000     7.92%
40,000    6,000   20,000       10.00%   2      -330.58     9.41%    6,000               200.00%    6,000     9.41%
40,000    7,000   20,000       10.00%   2       495.87    10.88%    7,000               250.00%    7,000    10.88%
40,000    8,000   20,000       10.00%   2     1,322.31    12.32%    8,000               300.00%    8,000    12.32%
40,000    9,000   20,000       10.00%   2     2,148.76    13.74%    9,000               350.00%    9,000    13.74%
40,000   10,000   20,000       10.00%   2     2,975.21    15.14%   10,000               400.00%   10,000    15.14%
40,000   11,000   20,000       10.00%   2     3,801.65    16.52%   11,000               450.00%   11,000    16.52%
40,000   12,000   20,000       10.00%   2     4,628.10    17.87%   12,000               500.00%   12,000    17.87%
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
                                                                                                            ROR
 8.00%
 6.00%
 4.00%
 2.00%
 0.00%
         0         2,000         4,000         6,000       8,000       10,000     12,000    14,000
           Alt 1         Alt 2         I         PW1        PW2
       0        -100,000      -100,000     10%     113,636      97,249             0
       1          10,000        55,000     14%       77,417     76,521             1
       2          20,000        49,000     18%       49,068     59,291             2
       3          30,000        43,000     22%       26,610     44,809             3
       4          40,000        37,000     26%        8,616     32,514             4
       5          50,000        31,000     30%       -5,953     21,979             5
       6          60,000        25,000     34%      -17,869     12,874             6
       7          70,000        19,000     38%      -27,704      4,944             7
       8          80,000        13,000     42%      -35,893     -2,012             8
       9                                                                           9
      10                                                                          10
140,000                                                                  35.00%
120,000
                                                                         30.00%
100,000
                                                                         25.00%
 80,000
 60,000                                                                  20.00%
                                                                PW1
 40,000
                                                                PW2      15.00%
 20,000
                                                                         10.00%
     0
          0%     10%       20%       30%    40%       50%
-20,000                                                                   5.00%
-40,000
                                                                          0.00%
-60,000                                                                        0.00%
                  Rev           Cost        Profit     ROR          0.00%       2.00%      4.00%     6.00%
        -10,000                 Inflation      -10,000   28.65%   -10,000     -10,000    -10,000   -10,000
                        6,000         2,000      4,000              4,000       3,960      3,920     3,880
                        6,000         2,000      4,000              4,000       3,919      3,837     3,753
                        6,000         2,000      4,000              4,000       3,878      3,750     3,618
                        6,000         2,000      4,000              4,000       3,835      3,660     3,475
                        6,000         2,000      4,000              4,000       3,792      3,567     3,324
                                                       F            0.00%       2.00%      4.00%     6.00%
                                                       ROR        28.65%      27.32%     25.89%    24.35%




0.00%              2.00%              4.00%           6.00%           8.00%             10.00%        12.00%
           8.00%    10.00%    12.00%
         -10,000    -10,000   -10,000
           3,840      3,800     3,760
           3,667      3,580     3,491
           3,481      3,338     3,190
           3,279      3,072     2,853
           3,061      2,779     2,475
           8.00%    10.00%    12.00%
         22.69%     20.87%    18.89%




                               ROR




12.00%             14.00%
Face   Face Interest Payment Periods Term   Purchase Raw ROR Inflation Real ROR
11,000          5.00%               1     9      8,500  8.75%     3.30%     5.28%
11,000          5.00%               1     9      8,500  8.75%     3.30%     5.28%

Face   Face Interest Payment Periods Term   Raw ROR Inflation Real ROR Purchase
11,000          5.00%               1     6     9.50%    3.30%   13.33% $7,370.46

Face    Face Interest Payment Periods         Term       Purchase Raw ROR Inflation Real ROR
  5,000          6.00%                    1          6        2,500 21.66%     0.00%    21.66%
  5,000          6.00%                    1          6        2,800 18.86%     0.00%    18.86% 25.00%
  5,000          6.00%                    1          6        3,100 16.43%     0.00%    16.43%
  5,000          6.00%                    1          6        3,400 14.30%     0.00%    14.30% 20.00%
  5,000          6.00%                    1          6        3,700 12.39%     0.00%    12.39%
  5,000          6.00%                    1          6        4,000 10.68%     0.00%    10.68% 15.00%
  5,000          6.00%                    1          6        4,300  9.13%     0.00%     9.13% 10.00%
  5,000          6.00%                    1          6        4,600  7.72%     0.00%     7.72%
  5,000          6.00%                    1          6        4,900  6.41%     0.00%     6.41% 5.00%
  5,000          6.00%                    1          6        5,200  5.21%     0.00%     5.21%
  5,000          6.00%                    1          6        5,500  4.09%     0.00%     4.09% 0.00%
                                                                                                      0
  5,000          6.00%                    1          6        5,800  3.04%     0.00%     3.04%

Value           2,500                4,000 1,000            -2,000       0           0          550
Prob           10.00%               20.00% 30.00%          40.00%    0.00%       0.00%

Dominance. Look at each state of nature and identify the best alternative for each state. If one alternative comes up as the b
Expectation. Using the probability that a state of nature will occur, calculate the expected outcome for each alternative and
Most Probable Future. Pick the alternative that has the best outcome for the most probable state of nature.
Aspiration - Level. Set a goal in terms of outcome and pick the alternative that has the maximum probability of equaling or e
Minimax (Maximin). Pessimistic approach which points to choosing the alternative which has the best worst outcome of all a
Maximax (Minimin). Optimistic approach which points to choosing the alternative which has the best of the best outcomes o
Hurwicz Principle. Apply a probability that the best outcome will occur for each alternative and the complement for the wors
Laplace. All outcomes equally likely, find expected value and choose best alternative of expected outcome.
Minimax Regret. Calculate the regret for each alternative for each state of nature as the difference between the outcome an
                                     Real ROR




          0       1,000     2,000      3,000     4,000     5,000      6,000     7,000




 rnative comes up as the best often, we might choose it because it dominates all other alternatives.
 for each alternative and select the alternative with the most favorable expected outcome.
 f nature.
 obability of equaling or exceeding the goal.
est worst outcome of all alternatives.
st of the best outcomes of all alternatives.
 complement for the worst and calculate the expected value and pick the best expected value.
utcome.
 between the outcome and the best outcome for that state. Choose the alternative that has the minimum maximum regret.
m maximum regret.
Newsboy Problem
Purchase    $10.00                        Newsboy Payoff Table
Price       $25.00                               Sell
Salvage       $2.00        0      10      20       30          40     50     60
                  10    -$80    $150    $150     $150       $150    $150   $150
                  20   -$160     $70    $300     $300       $300    $300   $300
                  30   -$240    -$10    $220     $450       $450    $450   $450
    Buy           40   -$320    -$90    $140     $370       $600    $600   $600
                  50   -$400   -$170     $60     $290       $520    $750   $750
                  60   -$480   -$250    -$20     $210       $440    $670   $900
                  70   -$560   -$330   -$100     $130       $360    $590   $820

          Prob          0.05     0.1    0.15      0.25        0.2    0.1    0.1


Regret Matrix             0      10      20         30        40      50     60
                 10      $0      $0    $150       $300      $450    $600   $750
                 20     $80     $80      $0       $150      $300    $450   $600
                 30    $160    $160     $80         $0      $150    $300   $450
                 40    $240    $240    $160        $80        $0    $150   $300
                 50    $320    $320    $240       $160       $80      $0   $150
                 60    $400    $400    $320       $240      $160     $80     $0
                 70    $480    $480    $400       $320      $240    $160    $80
    70 Exp        Sales
 $150      $138.5         34
 $300      $254.0
 $450      $335.0
 $600      $358.5
 $750      $336.0
 $900      $290.5
$1,050     $222.0

  0.05          1


   70 Max
 $900     $900
 $750     $750
 $600     $600
 $450     $450
 $300     $320
 $150     $400
   $0     $480
Marr                     9.00% Investment             110,000     Investment            60,000
                               Fixed AOC 1               5,000    Fixed AOC 2            2,500
                               Life                           7   Life                       5
                               Capacity/Time                12    Capacity/Time              8
                               STAFF                          1   STAFF                      2
                               STAFF HRLY Cost              30    STAFF HRLY Cost           21
                               ANN Fixed Cost       $26,855.96    ANN Fixed Cost    $17,925.55
                               Per Volume Cost              2.5   Per Volume Cost         5.25
                               Red = Trouble
                               Annual Crossover      3,247.42 Time (hrs)           270.61847 # of Hours in a year = 8760
                Total Cost for               2000   $31,855.96                2000 $28,425.55
                                             4000   $36,855.96                4000 $38,925.55
                                             6000   $41,855.96                6000 $49,425.55

Life                        5 MARR                     10.00%
Machine         A             B                   C
Investment             40,000             60,000      110,000
Variable Cost              21                18.5         13.5
Salvage                     0                   0            0
AWC               $10,551.90         $15,827.85 $29,017.72
                AW Delta      Cost Delta          Crossover
A to B             $5,275.95               (2.50)     2,110.38
A to C            $18,465.82               (7.50)     2,462.11
B to C            $13,189.87               (5.00)     2,637.97
                              Needs to be RED
# of Hours in a year = 8760
MARR             8.00% Capital                150,000
Project   Investment Project Equivalent Life            Present       Capital   Feasibility
          Amount       Annual Cash Flow     Years       Worth         Used      1 = Yes       PW Feasible
A               60,000              12,000          4    ($20,254.48)    60,000             1 ($20,254.48)
B               80,000              13,000          5    ($28,094.77)    80,000             1 ($28,094.77)
C               40,000                9,000         7      $6,857.33     40,000             1   $6,857.33
D                                                              $0.00          0             1       $0.00
E                                                              $0.00          0             1       $0.00
AB            140,000               25,000                -$48,349.25 140,000               1 ($48,349.25)
AC            100,000               21,000                -$13,397.15 100,000               1 ($13,397.15)
AD             60,000               12,000                -$20,254.48    60,000             1 ($20,254.48)
AE             60,000               12,000                -$20,254.48    60,000             1 ($20,254.48)
BC            120,000               22,000                -$21,237.44 120,000               1 ($21,237.44)
BD             80,000               13,000                -$28,094.77    80,000             1 ($28,094.77)
BE             80,000               13,000                -$28,094.77    80,000             1 ($28,094.77)
CD             40,000                9,000                  $6,857.33    40,000             1   $6,857.33
CE             40,000                9,000                  $6,857.33    40,000             1   $6,857.33
DE                  0                    0                      $0.00         0             1       $0.00
ABC           180,000               34,000                -$41,491.92 180,000               0       $0.00
ABD           140,000               25,000                -$48,349.25 140,000               1 ($48,349.25)
ABE           140,000               25,000                -$48,349.25 140,000               1 ($48,349.25)
ACD           100,000               21,000                -$13,397.15 100,000               1 ($13,397.15)
ACE           100,000               21,000                -$13,397.15 100,000               1 ($13,397.15)
ADE            60,000               12,000                -$20,254.48    60,000             1 ($20,254.48)
BCD           120,000               22,000                -$21,237.44 120,000               1 ($21,237.44)
BCE           120,000               22,000                -$21,237.44 120,000               1 ($21,237.44)
BDE            80,000               13,000                -$28,094.77    80,000             1 ($28,094.77)
CDE            40,000                9,000                  $6,857.33    40,000             1   $6,857.33
ABCD          180,000               34,000                -$41,491.92 180,000               0       $0.00
ABCE          180,000               34,000                -$41,491.92 180,000               0       $0.00
ABDE          140,000               25,000                -$48,349.25 140,000               1 ($48,349.25)
ACDE          100,000               21,000                -$13,397.15 100,000               1 ($13,397.15)
BCDE          120,000               22,000                -$21,237.44 120,000               1 ($21,237.44)
ABCDE         180,000               34,000                -$41,491.92 180,000               0       $0.00
                                                                                                $6,857.33
Max
Length        Width         Depth          Cost          Volume    Surface
         45            20              8          $15,000    7,200      1940
         40            24              6          $14,500    5,760      1728
         36            18              7          $12,900    4,536      1404
         20            10              5           $8,900    1,000        500
         32            24              9          $18,500    6,912      1776
         30            15              5                     2,250        900
                            Estimate              $10,191 $10,360 $10,956

Option        Capacity    Cost        Relationship
          1       800,000 $10,000,000            0.5
          2     1,600,000 $14,142,136

								
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