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Finm1416 Individual Compenent 4

The document provides financial projections for a company over a 6 year period, including revenue, costs, capital expenditures, depreciation, taxes, and cash flows. It calculates key metrics like NPV, IRR, and payback period which indicate the project has high profitability with an 87% IRR and 1.3 year payback.

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387 views5 pages

Finm1416 Individual Compenent 4

The document provides financial projections for a company over a 6 year period, including revenue, costs, capital expenditures, depreciation, taxes, and cash flows. It calculates key metrics like NPV, IRR, and payback period which indicate the project has high profitability with an 87% IRR and 1.3 year payback.

Uploaded by

Ma Hi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Data Given

Year 1 Annual Growth


Sales in Units $ 9,000.00 12%
Revenue per unit $ 4,000.00 3%
Variable cost per unit $ 1,000.00 3%
Category (e.g. side effect)
Lost/increased sales $ 5,000,000 side effect
Administrative Costs $ 100,000
Fixed Costs $ 1,000,000
Boxes $ 30,000 side effect
Rent $ 160,000 opportunity cost
Market Research Report $ 40,000 sunk cost
R&D $ 80,000 sunk cost
Interest $ 24,000 financing cost
Working Capital $ 15,000

Capital Expenditures
Solar Panel Hybrid technology 3D printers
assembly system machine

Initial Cost $ 12,400,000 $ 5,000,000 $ 3,350,000


Depr life 20 10 $ 10
End of life book value $ - $ 100,000 $ -
Value at year 6 $ 8,680,000 $ 2,060,000 $ 1,340,000

Inflation 3%
Tax Rate 30%
Required return 17%

Outputs
NPV $62,247,770.9
IRR 87%
Payback 1.324

Net Proceeds at end of project (year 6)


Solar Panel Hybrid technology 3D printers
assembly system machine

Initial Cost $ 12,400,000 $ 5,000,000 $ 3,350,000


Useful Lifespan 20 10 10
End of life value $ - $ 100,000 $ -
Annual Depreciation $ 620,000 $ 490,000 $ 335,000

After tax cash flow from Sale of Asset in Year X


Initial Cost $ 12,400,000 $ 5,000,000 $ 3,350,000
Accum. Depn $ 3,720,000 $ 2,940,000 $ 2,010,000
Net Book Value $ 8,680,000 $ 2,060,000 $ 1,340,000
Sales Proceeds $ 3,000,000 $ 2,500,000 $ 2,200,000
Taxable -$ 5,680,000 $ 440,000 $ 860,000
Tax -$ 1,704,000 $ 132,000 $ 258,000

Net Cash Flow in Year 6 (= Proceeds - Tax)


$ 4,704,000 $ 2,368,000 $ 1,942,000
Fill out raw data from the task sheet
Make the cell red if you think the item is not-relevant for your analysis

make calculations or refer to cells above


0 1
Revenue   $ 36,000,000
Variable Costs $ 9,000,000
Other relevant CFs (side effects, opportunity costs, etc.) $ 6,130,000
Less: Admin expenses $ 100,000
Earnings before interest, tax, depreciation and amortisation (EBITDA) $ 20,770,000
Less: Depreciation: Solar Panel Assembly System $ 620,000
Less: Depreciation: Hybrid technology machine $ 490,000
Less: Depreciation: 3D printers $ 335,000
Earnings before interest and tax (EBIT) $ 19,325,000
Tax (EBIT x tax rate) $ 5,797,500
Net operating profit after tax (NOPAT)  $ 13,527,500
Add: Depreciation: Solar Panel Assembly System $ 620,000
Add: Depreciation: Hybrid technology machine $ 490,000
Add: Depreciation: 3D printers $ 335,000
Operating Cash Flows (OCF) $ 14,972,500

Capital Expenditures (Solar Panel Assembly System) -$ 12,400,000


Capital Expenditures (Hybrid technology machine) -$ 5,000,000
Capital Expenditures (3D printers) -$ 3,350,000
Additions to working capital $ 15,000
After-tax FCF -$ 20,765,000 $ 14,972,500

NPV 62,247,771
IRR 86.8667%
Payback $ 1.324
2 3 4 5 6
$ 41,529,600 $ 47,908,547 $ 55,267,299 $ 63,756,356 $ 73,549,333
$ 10,382,400 $ 11,977,137 $ 13,816,825 $ 15,939,089 $ 18,387,333
$ 6,130,000 $ 6,130,000 $ 6,130,000 $ 6,130,000 $ 6,130,000
$ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
$ 24,917,200 $ 29,701,410 $ 35,220,474 $ 41,587,267 $ 48,932,000
$ 620,000 $ 620,000 $ 620,000 $ 620,000 $ 620,000
$ 490,000 $ 490,000 $ 490,000 $ 490,000 $ 490,000
$ 335,000 $ 335,000 $ 335,000 $ 335,000 $ 335,000
$ 23,472,200 $ 28,256,410 $ 33,775,474 $ 40,142,267 $ 47,487,000
$ 7,041,660 $ 8,476,923 $ 10,132,642 $ 12,042,680 $ 14,246,100
$ 16,430,540 $ 19,779,487 $ 23,642,832 $ 28,099,587 $ 33,240,900
$ 620,000 $ 620,000 $ 620,000 $ 620,000 $ 620,000
$ 490,000 $ 490,000 $ 490,000 $ 490,000 $ 490,000
$ 335,000 $ 335,000 $ 335,000 $ 335,000 $ 335,000
$ 17,875,540 $ 21,224,487 $ 25,087,832 $ 29,544,587 $ 34,685,900

$ 4,704,000
$ 2,368,000
$ 1,942,000
$ 15,000
$ 17,875,540 $ 21,224,487 $ 25,087,832 $ 29,544,587 $ 43,714,900

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