Tasty Foods Corporation Worksheet

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CASE13CM | | Student Version | | 9/21/96 | | | | | | | | HEAVENLY FOODS CORPORATION | Capital Budgeting Methods, Cash Flow Estimation, and Risk Analysis | | | | | | | | This case combines capital budgeting decision methods, cash flow estimation, and risk analysis | | | | | which are presented in Cases 12I and 13I. In addition, the case focuses on quantifying the | | | | | strategic option value of developing the new line of lite frozen pizzas. | | | | | | | | | | | | | | | | | | | | The model develops incremental cash flow estimates, then calculates NPV, IRR, MIRR, ARR, and | | | | | payback for the lite athletic drink project. Also, this model contains a graph which can…show more content…
ash Flows: | | Year | Year | Year | Year | Year | | | 0 | 1 | 2 | 3 | 4 | | | -------- | -------- | -------- | -------- | -------- | Unit price | | $2.00 | $2.08 | $2.16 | $2.25 | $2.34 | Unit sales | | | ###### | ###### | ###### | ###### | | | | -------- | -------- | -------- | -------- | Revenues | | | | ###### | ###### | ###### | Fixed operating costs | | | 190,000 | 190,000 | 190,000 | 190,000 | Variable operating costs | | | ###### | 910,350 | ###### | 947,128 | | | | --------- | --------- | --------- | --------- | Total operating costs | | | ###### | ###### | ###### | ###### | | | | --------- | --------- | --------- | --------- | Depreciation | | | 0 | | 0 | 0 | Net cannibalization effects | | | 45,000 | 45,000 | 45,000 | 45,000 | | | | -------- | -------- | -------- | -------- | Before tax income | | | | ###### | ###### | ###### | Taxes | | | 0 | 147,556 | 164,501 | 182,270 | | | | -------- | -------- | -------- | -------- | Net income | | | $0 | ###### | ###### | | Plus depreciation | | | 0 | ###### | 0 | | | | | -------- | -------- | -------- | -------- | Net operating cash flow | | | | ###### | ###### | $0 | | | | -------- | -------- | -------- | -------- | Salvage value | | | | | | ###### | SV tax | | | | | | | Recovery of NWC | | | | | | 30,000 | | | | | | | -------- | Termination CF | | | | | |

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