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Estimated Cash Flows for the Segway People Sc...




Estimated Cash Flows for the Segway People Scenario Analysis: Estimated Cash Flows for the Segway People Mover Base Case Year 0 Years 1-12 BicycleScenarion Year 0 Years 1-12 Investmenet -5,400 Investment -5,400 Sales 16,000 Sales Variable Cost 13,000 Variable Cost Fixed cost 2,000 Fixed cost Depreciati on 450 Depreciay on Preas profit 550 Pretax Profit Taxes @ 40% 220 Taxes @ 40% Profit after tax 330 Profit after tax Operation cash flow 780 Operating cash flow Net cash flow 780 Net Cahs Flow NPV (OCCof 9%): $185.37 -5,400 NPV (OCCof 9%): -5,400 Consider the scenario in which a competing form of transportation, the bicycle, causes sales to drop to 90% of expected sales from the base case. a. Fill in the table on the right, including NPV b. What is maximum opportunity cost of capital in both the Base Case and the Bicycle Scenario such that you should undertake the Segway People Mover Project?


Paper#5935 | Written in 18-Jul-2015

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