Scribd Logo
Upload

Welcome to Scribd!

  • 16 views

    BV SV N $ 20,000 $ 0: Depreciation Method: Straight Line

    Uploaded by

    Windi Rodi Massang
    This document compares the cash flows from a project financed with 100% equity versus 50% equity and 50% debt. For the 100% equity scenario, it calculates cash flows before taxes, depreciation, taxable income, and cash flows after taxes using straight-line, double declining balance, and sum-of-years' digits depreciation methods. For the 50% equity/debt scenario, it similarly calculates cash flows incorporating a $10,000 loan at 10% interest. Both scenarios show the project generates positive cash flows each year.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    BV SV N $ 20,000 $ 0: Depreciation Method: Straight Line

    Uploaded by

    Windi Rodi Massang
    16 views4 pages
    This document compares the cash flows from a project financed with 100% equity versus 50% equity and 50% debt. For the 100% equity scenario, it calculates cash flows before taxes, depreciation, taxable income, and cash flows after taxes using straight-line, double declining balance, and sum-of-years' digits depreciation methods. For the 50% equity/debt scenario, it similarly calculates cash flows incorporating a $10,000 loan at 10% interest. Both scenarios show the project generates positive cash flows each year.

    Original Description:

    adasdasdsad

    Original Title

    TUGAS 5 -AIT (1)

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document compares the cash flows from a project financed with 100% equity versus 50% equity and 50% debt. For the 100% equity scenario, it calculates cash flows before taxes, depreciation, taxable income, and cash flows after taxes using straight-line, double declining balance, and sum-of-years' digits depreciation methods. For the 50% equity/debt scenario, it similarly calculates cash flows incorporating a $10,000 loan at 10% interest. Both scenarios show the project generates positive cash flows each year.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    16 views4 pages

    BV SV N $ 20,000 $ 0: Depreciation Method: Straight Line

    Uploaded by

    Windi Rodi Massang
    This document compares the cash flows from a project financed with 100% equity versus 50% equity and 50% debt. For the 100% equity scenario, it calculates cash flows before taxes, depreciation, taxable income, and cash flows after taxes using straight-line, double declining balance, and sum-of-years' digits depreciation methods. For the 50% equity/debt scenario, it similarly calculates cash flows incorporating a $10,000 loan at 10% interest. Both scenarios show the project generates positive cash flows each year.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    A.

    CFAT with 100% equity financing


    CFBT
    = Gross Income Expenses
    = $10,000 - $ 2,500
    = $7,500
    Depreciation method: straight line

    Depreciation

    Taxable Income (TI)


    Taxes

    BV SV
    n

    $ 20,000$ 0
    10

    $2,000/year

    = CFBT Depreciation = $7,500 - $2,000 = $5,500

    = TI x t = $5,500 x 30% = $1,650

    CFAT = CFBT Taxes = $7,500 - $1,650 = $5,850/year


    CFAT Table
    Years
    0
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    CFAT

    CFBT
    - $20,000
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $55,000

    Depreciation

    TI

    Taxes

    $2,000
    $2,000
    $2,000
    $2,000
    $2,000
    $2,000
    $2,000
    $2,000
    $2,000
    $2,000

    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500

    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $16,500

    CFAT
    - $20,000
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $38,500

    Depreciation method: double declining balance

    Depreciationrate

    Depreciation

    1
    n

    BV depreciationrate

    2
    =

    1
    10

    2
    10

    20

    $ 20,000 20

    $ 4,000

    Depreciation Table
    Year

    Computation

    Depreciation

    BV

    $20,000 x

    $4,000

    $20,000
    $16,000

    20%
    $16,000 x

    $3,200

    $12,800

    20%

    $12,800 x

    $2,560

    $10,240

    20%
    $10,240 x

    $2,048

    $8,192

    20%
    $8,192 x 20%
    $6,554 x 20%
    $5,243 x 20%
    $4,194 x 20%
    $3,355 x 20%
    $2,684 x 20%
    Depreciation

    $1,638
    $1,311
    $1,049
    $839
    $671
    $537
    $17,853

    $6,554
    $5,243
    $4,194
    $3,355
    $2,684
    $2,147

    5
    6
    7
    8
    9
    10
    Total

    CFAT Table
    Years
    0
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    CFAT

    CFBT
    - $20,000
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $7,500
    $55,000

    Depreciation

    TI

    Taxes

    $4,000
    $3,200
    $2,560
    $2,048
    $1,638
    $1,311
    $1,049
    $839
    $671
    $537

    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500
    $5,500

    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $1,650
    $16,500

    CFAT
    - $20,000
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $5,850
    $38,500

    Depreciation method: sum of the years digit


    The sum of number of years = (1+2+3+4+5+6+7+8+9+10) = 55

    Depreciationrate
    Depreciation

    the yearsreserve order


    the of number of years

    ( BV SV ) depreciationrate

    Depreciation Table
    Year
    1
    2
    3

    Computation
    $20,000 x
    10/55
    $20,000 x
    9/55
    $20,000 x
    8/55

    Depreciation
    $3,636

    BV
    $20,000
    $16,364

    $3,273

    $13,091

    $2,909

    $10,182

    4
    5
    6
    7
    8
    9
    10

    $20,000 x
    7/55
    $20,000 x
    6/55
    $20,000 x
    5/55
    $20,000 x
    4/55
    $20,000 x
    3/55
    $20,000 x
    2/55
    $20,000 x
    1/55
    Total Depreciation

    Taxable Income (TI)


    Taxes

    $2,545

    $7,636

    $2,182

    $5,455

    $1,818

    $3,636

    $1,455

    $2,182

    $1,091

    $1,091

    $727

    $364

    $364

    $0

    $20,000

    = CFBT Depreciation

    = TI x t

    CFAT Table
    Years

    CFBT

    Depreciati
    on

    TI

    Taxes

    CFAT

    - $20,000

    $7,500

    $3,636

    $3,864

    $1,159.20

    $6,341

    $7,500

    $3,273

    $4,227

    $1,268.10

    $6,232

    $7,500

    $2,909

    $4,591

    $1,377.30

    $6,123

    $7,500

    $2,545

    $4,955

    $1,486.50

    $6,014

    $7,500

    $2,182

    $5,318

    $1,595.40

    $5,905

    $7,500

    $1,818

    $5,682

    $1,704.60

    $5,795

    $7,500

    $1,455

    $6,045

    $1,813.50

    $5,687

    $7,500

    $1,091

    $6,409

    $1,922.70

    $5,577

    $7,500

    $727

    $6,773

    $2,031.90

    $5,468

    10

    $7,500

    $364

    $7,136

    $2,140.80

    $5,359

    CFAT

    $55,000

    $16,500

    $38,500

    - $20,000

    B. CFAT with 50% equity - 50% debt financing


    Cash Flow Before Taxes (CFBT) value per year
    CFBT
    = Gross Income Expenses
    = $10,000 - $ 2,500
    = $7,500

    Depreciation method: straight line


    Depreciation

    BV SV
    n

    Loan Principal

    $ 10,000
    10

    Loan Interest

    = $10,000 x 10% = $1,000

    Taxable Income (TI)

    $ 20,000$ 0
    10

    $2,000

    $1,000/year

    = CFBT Depreciation Interest = $7,500 - $2,000

    $1,000
    = $4,500
    Taxes
    CFAT

    = TI x t = $4,500 x 30% = $1,350


    = CFBT Taxes Loan Principal Loan Interest
    = $7,500 - $1,350 - $1,000 - $1,000
    = $4,150/year

    CFAT Table
    Years

    CFBT

    Depreciati
    on

    Interest

    Principa
    l

    0
    1

    $10,000
    $7,500

    $2,000

    $1,000

    $1,000

    $7,500

    $2,000

    $1,000

    $7,500

    $2,000

    $7,500

    TI

    Taxes

    CFAT

    $4,500

    $1,350

    $10,000
    $4,150

    $1,000

    $4,500

    $1,350

    $4,150

    $1,000

    $1,000

    $4,500

    $1,350

    $4,150

    $2,000

    $1,000

    $1,000

    $4,500

    $1,350

    $4,150

    $7,500

    $2,000

    $1,000

    $1,000

    $4,500

    $1,350

    $4,150

    $7,500

    $2,000

    $1,000

    $1,000

    $4,500

    $1,350

    $4,150

    $7,500

    $2,000

    $1,000

    $1,000

    $4,500

    $1,350

    $4,150

    $7,500

    $2,000

    $1,000

    $1,000

    $4,500

    $1,350

    $4,150

    $7,500

    $2,000

    $1,000

    $1,000

    $4,500

    $1,350

    $4,150

    10

    $7,500

    $2,000

    $1,000

    $1,000

    $4,500

    $1,350

    $4,150

    CFAT

    $65,000

    $10,00
    0

    $10,000

    $13,50
    0

    $31,500

    You might also like