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Part A - Solutions a) Year Year Year Year Year Year Year Year Periods 0 1 2 3 4 5 6 7 8 Cash Inflows

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Added on  2020-04-01

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Part A – Solutions a)Base Scenario Year Year Year Year Year Year Year Year Periods 0 1751 2 3 4 5 6 7 8 Cash inflows 1,445,000 1,589,500 1,748,450 1,923,295 2,115,625 2,327,187 2,559,906 2,815,896 Plus cost of savings 0 0 0 0 0 0 Less costs 1,181,000 1,251,860 1,326,972 1,406,290 1,490,985 1,580,

Part A - Solutions a) Year Year Year Year Year Year Year Year Periods 0 1 2 3 4 5 6 7 8 Cash Inflows

   Added on 2020-04-01

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Part A – Solutionsa)Base ScenarioYearYearYearYearYearYearYearYearYearPeriods0 1 2 3 4 5 6 78 Cash inflows1,445,000 1,589,500 1,748,450 1,923,295 2,115,625 2,327,187 2,559,906 2,815,896 Plus cost of savings00000000Less costs 1,181,000 1,251,860 1,326,972 1,406,590 1,490,985 1,580,444 1,675,271 1,775,787 Less Depreciation Exp206,250 206,250 206,250 206,250 206,250 206,250 206,250 206,250 Net Income before tax57,750 131,390 215,228 310,455 418,389 540,493 678,385 833,859 Less Income Tax17,325 39,417 64,569 93,137 125,517 162,148 203,515 250,158 Net Income after Tax40,425 91,973 150,660 217,319 292,872 378,345 474,869 583,701 Add Depreciation206,250 206,250 206,250 206,250 206,250 206,250 206,250 206,250 After Tax Cash Flow 246,675 298,223 356,910 423,569 499,122 584,595 681,119 789,951 Initial project cost(1,650,000)After Tax Terminal Cash inflow70,000 After Tax Cas Flow(1,650,000)246,675 298,223 356,910 423,569 499,122 584,595 681,119 859,951 PBP4.65 Discounted PBP7.13 NPV227,758 Profitability Index1.13803 b)Worst ScenarioYearYearYearYearYearYearYearYearYear
Part A - Solutions a) Year Year Year Year Year Year Year Year Periods 0 1 2 3 4 5 6 7 8 Cash Inflows_1
Periods0 1 2 3 4 5 6 78 Cash inflows1,445,000 1,531,700 1,623,602 1,721,018 1,824,279 1,933,736 2,049,760 2,172,746 Plus cost of savings00000000Less costs 1,181,000 1,299,100 1,429,010 1,571,911 1,729,102 1,902,012 2,092,214 2,301,435 Less Depreciation Exp206,250 206,250 206,250 206,250 206,250 206,250 206,250 206,250 Net Income before tax57,750 26,350 (11,658)(57,143)(111,073)(174,526)(248,703)(334,939)Less Income Tax17,325 7,905 (3,497)(17,143)(33,322)(52,358)(74,611)(100,482)Net Income after Tax40,425 18,445 (8,161)(40,000)(77,751)(122,168)(174,092)(234,457)Add Depreciation206,250 206,250 206,250 206,250 206,250 206,250 206,250 206,250 After Tax Cash Flow 246,675 224,695 198,089 166,250 128,499 84,082 32,158 (28,207)Initial project cost(1,650,000)After Tax Terminal Cash inflow70,000 After Tax Cas Flow(1,650,000)246,675 224,695 198,089 166,250 128,499 84,082 32,158 41,793 Cumulative CF(1,650,000)246,675 471,370 669,459 835,709 964,208 1,048,290 1,080,448 1,122,240 PBPAfter 8 years Discounted PBPAfter 8 yearsNPV(931,822)Profitability Index0.43526 c)Best scenarioYearYearYearYearYearYearYearYearYearPeriods0 1 2 3 4 5 6 78 Cash inflows1,445,001,661,751,911,013 2,197,662,527,314 2,906,411 3,342,373 3,843,729
Part A - Solutions a) Year Year Year Year Year Year Year Year Periods 0 1 2 3 4 5 6 7 8 Cash Inflows_2

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