Cash Position Table Time Zero at Start-up

Example 8 Cumulative Cash Position Table (Time Zero at Start-up) A specialty chemical company is considering the manufacture of an additive for use in the plastics industry. The following is a list of production, sales, and cash operating expenses. 

Year Production, Mlb Sales, 1,000 Cash operating expenses, 1,000  

Land for the project is available at 300,000. The fixed capital investment was estimated to be 12,000,000. A working capital of 1,800,000 is needed initially for the venture. Start-up expenses based upon past experience are estimated to be 750,000. The project qualifies under IRS guidelines as a 5-year class life investment. The company uses MACRS depreciation with the half-year convention. At the conclusion of the prmect, the land and working capital are returned to management. Develop a cash flow analysis for this project, using a cumulative cash position table (Table 9-25). 

Land Fixed capital investment 1000 Working capital -300 -12,000 -1,800  

9-11 Typical cumulative cash position plot, (a) Time zero is start-up. (b) Time zero occurs when first funds are spent. 

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Example 8 Cumulative Cash Position Table (Time Zero at Start-up). 9-28... 

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