Labor Cost Calculation

Semi-automated
Operation
Maintainance
Operators
12
3
Hours
8
8
Shift
2
1
Wage/hr
7.33
7.85
Days/year
210
210
Vulcan Mold
Operation
Maintainance
Operators
1
0
Hours
8
0
Shift
2
0
Wage/hr
11.36
0
Days/year
210
0
WACC Calculation
Kd
6.8%
wd
33%
Risk Premium
6%
Risk free rate
5.3%
Beta
1.25
Ke
12.8%
we
67%
tax rate
43%
WACC
9.86%
Inflation

Initial Outlay
Purchase of Vulcan
Electrical
Additional cost
Total Cost
Original Cost of semi automatic machines
Cumulative Depreciation
Book Value of machines
Proceeds from sale of machines
Loss on Sale
Reduction in tax

850000
155000
5000
1010000
415807
130682
285125
130000
155125
66704

Total Initial Outlay

(813296)

Estimated Cash Flow for Vulcan

Labor Cost
Maintainance Cost
Electricity Cost
Labor Saving
Depreciation
Cost before tax
tax
Cost after tax
(+) Depreciation
(-) Capital Exp
Cash Flow
Estimated Cash flow for Semi Auto Machines
Operating Cost
Maintainance Cost
Maintainance Supplies
Electricity cost

(813296)

1
(38170)
(59500)
(26850)
5200
(126250)
(245570)
(105595)
(139975)
126250
0

2
(38170)
(59500)
(26850)
5200
(126250)
(245570)
(105595)
(139975)
126250
0

(813296)

(13725)

(13725)

1
(295546)
(39564)
(4000)
(12300)

2
(295546)
(39564)
(4000)
(12300)

Depreciation
Cost before tax
tax
Cost after tax
(+) Depreciation
(-) Capital Exp

(47520)
(398930)
(171540)
(227390)
47520
0

(47520)
(398930)
(171540)
(227390)
47520
0

Cash Flow

(179870)

(179870)

Incremental Cash Flow estimate

New Cash Flow
Old Cash Flow
Incremental Cash Flow

(813296)
0
(813296)

(13725)
(179870)
166145

(13725)
(179870)
166145

Present Values Incremental Cash Flow

IRR
NPV

(813296) 151240.3 137672.6

13.01%
97988

3
(38170)
(59500)
(26850)
5200
(126250)
(245570)
(105595)
(139975)
126250
0

4
(38170)
(59500)
(26850)
5200
(126250)
(245570)
(105595)
(139975)
126250
0

5
(38170)
(59500)
(26850)
5200
(126250)
(245570)
(105595)
(139975)
126250
0

6
(38170)
(59500)
(26850)
5200
(126250)
(245570)
(105595)
(139975)
126250
0

7
(38170)
(59500)
(26850)
5200
(126250)
(245570)
(105595)
(139975)
126250
0

8
(38170)
(59500)
(26850)
5200
(126250)
(245570)
(105595)
(139975)
126250
0

(13725)

(13725)

(13725)

(13725)

(13725)

(13725)

3
(295546)
(39564)
(4000)
(12300)

4
(295546)
(39564)
(4000)
(12300)

5
(295546)
(39564)
(4000)
(12300)

6
(295546)
(39564)
(4000)
(12300)

7
(295546)
(39564)
(4000)
(12300)

8
(295546)
(39564)
(4000)
(12300)

(47520)
(398930)
(171540)
(227390)
47520
0

(47520)
(398930)
(171540)
(227390)
47520
0

(47520)
(398930)
(171540)
(227390)
47520
0

(47520)
(398930)
(171540)
(227390)
47520
0

(179870)

(179870)

(179870)

(179870)

(200303)

(200303)

(13725)
(179870)
166145

(13725)
(179870)
166145

(13725)
(179870)
166145

(13725)
(179870)
166145

(13725)
(200303)
186579

(13725)
(200303)
186579

(351410)
(151106)
(200303)
0

(351410)
(151106)
(200303)
0

125322 114079.4 103845.4 94529.41 96632.07 87963.22