Using the scenario below create your own Word doc or Excel spreadsheet and complete the tables.
A firm expects to have earnings before interest and taxes (EBIT) of $165,000 in each of the next 6 years. It pays annual interest of $15,000. The firm is considering the purchase of an asset that costs $150,000, requires $10,000 in installation cost, and has a recovery period of 6 years. It will be the firm’s only asset, and the asset’s depreciation is already reflected in its EBIT estimates.
Cost 
Percentages 
Depreciation 

Year 
(1) 
(2) 
(1) x (2) 
1 

2 

3 

4 

5 

6 

Cost = asset cost + installation cost 
NOPAT 
Depreciation 
Operating Cash Flows 

EBIT 
[(1) x (1  .40)] 
[(2) + (3)] 

Year 
(1) 
(2) 
(3) 
(4) 
1 

2 

3 

4 

5 

6 
This assignment is worth 30 points, 15 points each for the Depreciation Schedule and Operating Cash Flows.
Use the upload button to submit a Word doc or Excel spreadsheet with the two completed tables.
Subject  Business 
Due By (Pacific Time)  09/21/2015 01:30 am 
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