Acc 370 Caledonia Exercise, Part 3 and 4

3. What is the projects initial outlay?
The projects initial outlay is the capital essential to purchase the congeal and equipment, plus the shipping and introduction
of the plant and the initial working capital needed to start the fruit. Therefore, the initial outlay for the project is:

Cost of the new equipment 7,900,000
Shipping and installation 100,000
Initial working capital required to start production 100,000
$8,100,000
$8,100,000 is the initial outlay for the new project.


4. Sketch out a cash mix diagram for this project.





Caledonia coin Flow

socio-economic class 1 family 2 Year 3 Year 4 Year 5
Units Sold 70,000 120,000 140,000 80,000 60,000

Projected Revenues 21,000,000 36,000,000 42,000,000 24,000,000 15,600,000
(-) COGS 12,600,000 21,600,000 25,200,000 14,400,000 10,800,000
(-) sack (15%) 3,150,000 5,400,000 6,300,000 3,600,000 2,340,000
(=) Gross Profit/( Loss) 5,250,000 9,000,000 10,500,000 6,000,000 2,460,000

(-) Annual Fixed Cost 200,000 200,000 200,000 200,000 200,000
(-) depreciation ( 8,000,000 / 5) 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000
(=) Net Operating Profit/ (Loss) 3,450,000 7,200,000 8,700,000 4,200,000 660,000

(-) Taxes (34%) 1,173,000 2,448,000 2,958,000 1,428,000 224,400
(=) NOPAT 2,277,000 4,752,000 5,742,000 2,772,000 435,600

(+) Depreciation 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000
(=) Operating Cash Flow 3,877,000 6,352,000 7,342,000 4,372,000 2,035,600

The following graph shows the above cash flow:If you want to get a full essay, order it on our website: Ordercustompaper.com



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