Assumptions are important because they put the numbers into a context
The table makes a number of assumptions
The average price of the product will increase annually by 5%
The volume sold will increase annually by 15%
Depreciation is computed using the IRS's tables for 7- year property
Tax depreciation is used because it affects the outflow of cash in the form of tax payments
Fixed costs will increase by an annual rate of 5%
The tax rate is calculated at 34%
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