ACCT434/436
Course Project
Elon Motors
Project Template
Elon Motors
Data:
Cost of new equipment
Expected life of equipment in years
Salvage Value
Life Production
Annual production or purchase needs
Number of workers needed
Annual hours to be worked per employee
Earnings per hour for employees
Health Benefits – % of Wages
Cost of Direct Materials
Variable Manufacturing Overhead Costs
Unit Cost to Purchase Batteries
Required rate of return
Tax rate
Make
Cost to Produce
Annual cost of direct material:
Need – Cost direct material for of 2,500 Batteries
Annual cost of direct labor for new employees:
Wages
Health benefits
Total wages and benefits
Other variable production costs
Total annual production costs
Annual Cost to Purchase Batteries
Purchase
Part 1 Cash Flows Over the Life of the Project
Item
Annual cash savings
Tax savings due to depreciation
Before Tax
Amount
Tax
Effect
After Tax
Amount
Total after-tax annual cash flow
Part 2 Payback Period
years
Part 3 Accounting Rate of Return
Accounting income as result of decreased costs
Annual cash savings
Less depreciation
Before tax income
Tax at Current Rate
After tax income
Accounting Rate of Return
Part 4 Net Present Value
Item
Cost of machine
Annual cash savings
Tax savings due to depreciation
Disposal value
Net Present Value
Before Tax
Amount
Tax %
Year
0
1-10
1-10
10
After Tax
Amount
PV
Factor
Part 5 Internal Rate of Return and Modified Internal Rate of Return
Item
Cost of machine
Year 1 inflow
Year 2 inflow
Year 3 inflow
Year 4 inflow
Year 5 inflow
Year 6 7nflow
Year 7 inflow
Year 8 inflow
Year 9 inflow
Year 10 inflow
After Tax
Amount
Year
Internal Rate of Return
Modified Internal Rate of Return
Net Present Value
0
1
2
3
4
5
6
7
8
9
10
Present
Value
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Turnitin Report
Formatting
Title Page
Citation
Outline
