Finance

 MP-450 Analysis
 Initial Outlay
 purchase price    1,600,000.00
 warranty cost        100,000.00
 Import duty and transportation        120,000.00
 installation costs          80,000.00
 feasibility study          50,000.00
 total cost    1,950,000.00
 year 1  year 2  year 3  year 4  year 5  year 6  totals
 additional sales    8,000,000.00    8,000,000.00    8,000,000.00    8,000,000.00    8,000,000.00    8,000,000.00    48,000,000.00
 cost of goods produced    7,100,000.00    6,400,000.00    6,400,000.00    6,400,000.00    6,400,000.00    6,400,000.00    39,100,000.00
 investment in inventory
 sales and administration expenses        240,000.00        240,000.00        240,000.00        240,000.00        240,000.00        240,000.00      1,440,000.00
 net income        660,000.00    1,360,000.00    1,360,000.00    1,360,000.00    1,360,000.00    1,360,000.00      7,460,000.00
 present value at 18% WACC        559,322.03        976,730.82        827,737.99        701,472.87        594,468.53        503,786.89      4,163,519.14
                    1.18                     1.39                     1.64                     1.94                     2.29                     2.70                     11.14
 Net Present Value    2,213,519.14
Table of cash flows
 Accounts  receivable        500,000.00        500,000.00        500,000.00        500,000.00        500,000.00        500,000.00      3,000,000.00
 Accounts payable        443,750.00        400,000.00        400,000.00        400,000.00        400,000.00        400,000.00      2,443,750.00
 Cash Inflows    7,500,000.00    7,500,000.00    7,500,000.00    7,500,000.00    7,500,000.00    7,500,000.00    45,000,000.00
 Salvage value        300,000.00          300,000.00
 Cash outflows    6,656,250.00    6,000,000.00    6,000,000.00    6,000,000.00    6,000,000.00    6,000,000.00    36,656,250.00
 sales and administration        240,000.00        240,000.00        240,000.00        240,000.00        240,000.00        240,000.00      1,440,000.00
 Net Cashflow        843,750.00    1,500,000.00    1,500,000.00    1,500,000.00    1,500,000.00    1,500,000.00      8,343,750.00
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