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Enviado por   •  22 de Mayo de 2015  •  317 Palabras (2 Páginas)  •  188 Visitas

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Mini Case: Goodweek Tires, Inc.

Assumptions

PP&E Investment 120,000,000

Useful life of PP&E Investment (years) 7

Salvage Value of PP&E Investment 60,000,000

Annual Depreciation Expense (7 year MACRS)

Ending Book

Year MACRS % Depreciation Value

1 14.29% 17,148,000 102,852,000

2 24.49% 29,388,000 73,464,000

3 17.49% 20,988,000 52,476,000

Last year of project 4 12.49% 14,988,000 37,488,000

5 8.93% 10,716,000 26,772,000

6 8.93% 10,716,000 16,056,000

7 8.93% 10,716,000 5,340,000

8 4.45% 5,340,000 0

SuperTread price/unit in OEM market (year 1) 36.00

SuperTread price/unit in Replacement market (year 1) 59.00

SuperTread cost/unit (year 1) 18.00

Year 1 marketing and admin costs 25,000,000

Annual inflation rate 3.25%

Corporate Tax rate 40.00%

Beta (1/24/97 Valueline) 1.30

Rf (30 year U.S. Treasury Bond) 5.50%

Rm (S&P 500 30 year average) 13.50%

Re (from CAPM) Re= Rf+ e[ RM - Rf ] = 0.055 + 1.3[ 0.135 - 0.055 ] = 15.90% 15.90%

Year 1 OEM Market for SuperTread (2 million new cars x 4 tires/car) 8,000,000

OEM Market growth 2.50%

SuperTread share of OEM market 11.00%

Year 1 Replacement Market for SuperTread 14,000,000

Replacement Market growth 2.00%

SuperTread share of Replacement market 8.00%

Year 0 1 2 3 4

Sales

OEM Market

Units 880,000 902,000 924,550 947,664

Price 36.00 37.53 39.13 40.79

Total OEM Market 31,680,000 33,852,060 36,173,042 38,653,156

Replacement Market

Units 1,120,000 1,142,400 1,165,248 1,188,553

Price 59.00 61.51 64.12 66.85

Total Replacement Market 66,080,000 70,266,168 74,717,530 79,450,885

Total Sales 97,760,000 104,118,228 110,890,572 118,104,041

Variable Costs

Units (OEM + Replacement) 2,000,000 2,044,400 2,089,798 2,136,217

Cost 18.00 18.77 19.56 20.39

Total Variable Costs 36,000,000 38,363,166 40,881,699 43,565,831

SG&A 25,000,000 25,812,500 26,651,406 27,517,577

Depreciation 17,148,000 29,388,000 20,988,000 14,988,000

EBIT 19,612,000 10,554,562 22,369,466 32,032,633

Interest 0 0 0 0

Tax (40%) 7,844,800 4,221,825 8,947,786 12,813,053

Net Income 11,767,200

...

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