Start of year

Dep. old machine Salvage Value

80% of Dep. value
2000
-30
30
2001
7.5
22.5
2002
5.625
16.875
2003
4.21875
12.65625
2004
3.1640625
9.4921875
2005
2.373046875
7.119140625
5.6953125
2006
1.7797851563
5.3393554688
2007
1.3348388672
4.0045166016
2008
1.0011291504
3.0033874512
2009
0.7508468628
2.2525405884
2010
0.5631351471
1.6894054413
1.351524353

Terminal Value

Cost of Capital
Cost of existing debt
cost of new debt
cost of equity

9.602833701
6.5
6.6625
14

100
44.019921875
100
244.019921875

0.4098026064
0.1803947872
0.4098026064

Dep. new Machine

-50
12.5
9.375
7.03125
5.2734375
3.955078125

Salvage Value

50
37.5
28.125
21.09375
15.8203125
11.865234375

80% of Dep. value

Change in Dep.

10.7202148438
8.0401611328
6.0301208496
4.5225906372
9.4921875 3.3919429779
9.966796875

EBITDA

EBIT

8
8
8
8
8
8

-2.720215
-0.040161
1.969879
3.477409
4.608057

EBIT(1-t)

Cash Flows

-44.019921875
-1.76814
8.9520751953
-0.026105
8.0140563965
1.280421
7.3105422974
2.260316
6.782906723
2.995237
6.3871800423
8.5476963043
9.96
NPV@ Cost of capital
NPV@ Cost of Equity

FCF

Discount Factor

-44.019921875
8.9520751953
8.0140563965
7.3105422974
6.782906723
14.934876347
16.347180042
($9.49)
($13.29)

1
0.9123851695
0.8324466975
0.7595120211
0.6929675041
0.6322532737

1
0.8771929825
0.7694675285
0.6749715162
0.5920802774
0.5193686644

7.852698
6.166556
4.934408
4.016025
7.756707

7.852698
6.166556
4.934408
4.016025
8.490213

-13.29353 -12.56002