Page 63 - ESSAYBCTO ENG 6nd
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Eighth , the investment recovery amount was calculated as follows .
Investment recovery amount
= Capital expenditure + increase/decrease in working capital – depreciation
= Invested capital ( capital expenditure before product launch + capital expenditure
after product launch + increase/ decrease in working capital ) - Depreciation (
depreciation before product launch + depreciation after product launch )
= Invested capital (300 + 6,136 + 4,397) - Depreciation (60 + 3,019)
= 10,833 – 3,079 = 7,754 (3-3)
Ninth , future cash flow was calculated as follows .
future cash flow
= Operating profit after tax + depreciation before product launch + depreciation after
product launch –
Capital expenditure before product launch - Capital expenditure after product launc
h - Increase or decrease in working capital
+ Investment recovery amount (3-4)
Cash flow for year 1 = 0 + 60 + 0 – 300 - 0 – 0
= -240
Cash flow for year 2 = 1,191 + 0 + 87 - 0 - 134 – 283
= 861
Cash flow for year 3 = 9,193 + 0 + 267 – 0 – 900 – 1,616
= 6,944
4th year cash flow = 22,561 + 0 + 567 – 0 – 1,503 – 1,274
= 20,351
Cash flow for year 5 = 36,044 + 0 + 871 – 0 – 1,516- 27
= 35,372
6th year cash flow = 54,572 + 0 + 1,227 - 0 – 2,083 – 1,197 + 7,754
= 60,273 QR
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