- Pre Tax Cost Of Debt Numbers To Be Used In Calculating The Weighted Cost Of Capital Marginal Tax Rate 35 0 Cost Of De 1 (97.83 KiB) Viewed 20 times
(pre-tax cost of debt) Numbers to be used in calculating the weighted cost of capital Marginal tax rate 35.0% Cost of Debt 8.3% After Tax Cost of Equity 8.0% Weighted amount of debt (long run) 20.0% Weighted amount of equity (long run) 80.0% NOTE: You will need to complete the tables below. To do so, equations will need to be entered into the shaded cells below. Total Cash Revenue is just the sum of the primary source of cash revenue for the particular investment and its other cash revenue. To properly incorporate the risk analysis, be sure to multiply the milk price and the corn yield by its associated adjustment factor. Use that adjusted cell when calculating the cash revenue cell. Net Cash Flow Milk Cash Revenue Table A2. Dairy assessment cash flows Total Cash Total Cash Year Revenue Expense Salvage Value 1 $882,700 2 2 $914,629 3 $821,761 4 $876,264 5 $932,980 6 $956,304 7 $1,016,783 8 $1,042,202 9 $1,106,680 10 $1,134,347 $835,000 Total initial investment - $1,700,000 Taxes already account for depreciation expense. Taxes $13,044 ($54,294) $19,129 $31,966 $37,547 $51,435 $70,385 $64,740 $64,071 $351,565 Cash Revenue Projections for Milk Expansion Milk Price ($ per cwt, Year including $1 premium) Adjusted Milk Price 1 $13.60 2 $12.80 3 $13.50 4 $13.70 5 $13.80 6 $13.90 7 $14.00 8 $14.10 9 $14.30 10 $14.40 Milk Production per Cow per Year (cwt) 200 205 210 220 230 230 240 240 250 250 New Cows 350 350 350 350 350 350 350 350 350 350 Other Cash Revenue $141,219 $144,345 $120,416 $122,865 $126,085 $128,560 $133,652 $134,544 $130,258 $135,588 Adjustment Factor on Milk Price 100.0% Adjusted Com Yield (BushelAcre) Food Grade Com Cash Revenue Net Cash Flow Table A3. Crop assessment cash flows Total Cash Total Cash Year Revenue Expense Salvage Value 1 1 $20,301 2 $20,910 3 $21,242 4 $21,583 5 $21,932 $30,000 Total initial investment - $76,800 Taxes already account for depreciation expense. Taxes $5,590 $3,777 $4,139 $4,413 $15,054 Cash Revenue Projections for Food Grade Com Expansion New Food-grade Com Year Acres Com Yield (BushelAcre 1 400 145 2 400 145 3 400 145 4 400 145 5 400 145 Food Grade Com Premium ($/Bushel) $0.40 $0.40 $0.40 $0.40 $0.40 Other Cash Revenue $18,832 $19,160 $18,922 $18,687 $18.454 Adjustment Factor on Com Yield 100.0%