TABLE 6.

1 IM&C's guano project -- projections ($ thousands) reflecting inflation and straig

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Capital investment
Accumulated depn.
Year-end book value
Working capital
Total book value (3 + 4)
Sales
Cost of goods sold
Other costs
Depreciation
Pretax profit
Tax
Profit after tax (10 - 11)

0
10,000
10,000

4,000
-4,000
-1,400
-2,600

1
1,583
8,417
550
8,967
523
837
2,200
1,583
-4,097
-1,434
-2,663

2
3,167
6,833
1,289
8,122
12,887
7,729
1,210
1,583
2,365
828
1,537

Period
4

3
4,750
5,250
3,261
8,511
32,610
19,552
1,331
1,583
10,144
3,550
6,593

Notes:
No. of years depreciation
Assumed salvage value in depreciation calculation
Tax rate (percent)

6
500
35

6,333
3,667
4,890
8,557
48,901
29,345
1,464
1,583
16,509
5,778
10,731

lecting inflation and straight line depreciation

5
7,917
2,083
3,583
5,666
35,834
21,492
1,611
1,583
11,148
3,902
7,246

6
9,500
500
2,002
2,502
19,717
11,830
1,772
1,583
4,532
1,586
2,946

7
-1,949
0
0
0
0

0
1,449
507
942

TABLE 6.2 IM&C's guano project -- initial cash flow analysis with straight-line depreciation

0
1
2.
3.
4.
5.
6.
7
8.
9.

Capital investment and disposal

Change in working capital
Sales
Cost of goods sold
Other costs
Tax
Operating cash flow (3 - 4 - 5 - 6)
Net cash flow (1 + 2 + 3)
Present value
Net present value =
Cost of capital (percent)

-10,000
0
0
4,000
-1,400
-2,600
-12,600
-12,600
3,520
20

Go back to Table 6.1 to change Sales, Cost of goods sold, etc.

0
-550
523
837
2,200
-1,434
-1,080
-1,630
-1,358

2
0
-739
12,887
7,729
1,210
828
3,120
2,381
1,654

3
0
-1,972
32,610
19,552
1,331
3,550
8,177
6,205
3,591

s with straight-line depreciation ($ thousands)

Period
4
0
-1,629
48,901
29,345
1,464
5,778
12,314
10,685
5,153

5
0
1,307
35,834
21,492
1,611
3,902
8,829
10,136
4,074

6
0
1,581
19,717
11,830
1,772
1,586
4,529
6,110
2,046

7
1,442
2,002
0
0
0

3,444
961

TABLE 6.4 Tax Depreciation Schedules by Recovery-Period Class

Recovery-Period
Class
3-year
5-year
7-year
10-year
15-year
20-year

1
33.33
20.00
14.29
10.00
5.00
3.75

2
44.45
32.00
24.49
18.00
9.50
7.22

3
14.81
19.20
17.49
14.40
8.55
6.68

4
7.41
11.52
12.49
11.52
7.70
6.18

11.52
8.93
9.22
6.93
5.71

5.76
8.92
7.37
6.23
5.28

8.93
6.55
5.90
4.89

Years
10 11

12

4.46
6.55 6.56 6.55 3.28
5.90 5.91 5.90 5.91 5.90
4.52 4.46 4.46 4.46 4.46

by Recovery-Period Class

ears
13

14

15

16

17

18

19

20

21

5.91 5.90 5.91 2.95

4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 2.23

TABLE 6.5 Tax payments on IM&C's guano project ($ thousands

No. of years depreciation (3, 5 or 7 years only)
Tax rate (percent)

5
35
0

MACRS %
Tax depreciation (MACRS % x depreciable investment)
1
2
3
4
5
6

Sales
Cost of goods sold
Other costs
Tax depreciation
Pretax profits
Tax

0
0
4,000
0
-4,000
-1,400

2
20.0
2,000

32.0
3,200

523
837
2,200
2,000
-4,514
-1,580

12,887
7,729
1,210
3,200
748
262

TABLE 6.6 IM&C's guano project -- revised cash flow analysis with MACRS deprecia

0
1
2.
3.
4.
5.
6.
7
8.
9.

Change in working capital

Capital investment & disposal
Sales
Cost of goods sold
Other costs
Tax
Operating cash flow (3 - 4 - 5 - 6)
Net cash flow (1 + 2 + 3)
Present value
Net present value =
Cost of capital (percent)

-10,000
0
0
4,000
-1,400
-2,600
-12,600
-12,600

-550
0
523
837
2,200
-1,580
-934
-1,484
-1,237

2
-739
0
12,887
7,729
1,210
262
3,686
2,947
2,047

3,802
20

Note: Vary depreciable life by changing inputs in these tables. Go back to Tables 6.1 or 6.2 to change sales

ano project ($ thousands)

Period
3
4
19.2
11.5
1,920
1,152
32,610
19,552
1,331
1,920
9,807
3,432

48,901
29,345
1,464
1,152
16,940
5,929

11.5
1,152

5.8
576

0.0
0

35,834
21,492
1,611
1,152
11,579
4,053

19,717
11,830
1,772
576
5,539
1,939

0
0
0
0
2,002
701

sis with MACRS depreciation ($ thousands)

3
-1,972
0
32,610
19,552
1,331
3,432
8,295
6,323
3,659

Period
4
-1,629
0
48,901
29,345
1,464
5,929
12,163
10,534
5,080

5
1,307
0
35,834
21,492
1,611
4,053
8,678
9,985
4,013

6
1,581
0
19,717
11,830
1,772
1,939
4,176
5,757
1,928

7
1,949
2,002
0
0
0
701
-701
3,269
912

6.1 or 6.2 to change sales, cost of goods sold, cost of capital etc.