Corporate Finance: NPV Calculation and Cash Flow Analysis

Running head: CORPORATE FINANCE
Corporate Finance
Name of Student:
Name of University:
Author’s Note:

1CORPORATE FINANCE
Table of Contents
1. Cash Flows at the Start................................................................................................................2
2. Cash Flows Over the Life............................................................................................................0
3.Cash Flows at the End..................................................................................................................0
4. The NPV of Reef Magic 4...........................................................................................................4

2CORPORATE FINANCE
1. Cash Flows at the Start
Particulars Year 0 Year 1
Initial Outlay -2603000
Borrowings 2000000.00
Annual Demand of Passengers (in
Units) 28000
Inventory 700000
Accounts Receivable 3600000
Upgrade Contribution 2000000
Price per Vessel 1400
Net Revenue 39200000
Total Income 47500000.00
Accounts Payable 1880000
Additional Personnel Hire Cost 7400
Fixed Operating Cost 14500000
Operating Expense 370000
Annual Wages Expenses 7800000
Wages Associated to Purchase 1450000
Fuel Expense 1100000
Placement Fee 8000
Maintenance 0
Purchase of New Vessel 340000
Interest on loan 140000
Depreciation Expenses 8000000
Total Expenses 35595400
Net Operating Profit before Tax 11904600
Less: Tax @30% -3571380
Net Operating Profit after Tax 8333220
Add: Depreciation Expenses -8000000
Net Operating Cash Flow 0 333220
Recovery of Working Capital
Total Net Cash Flow -2603000 333220

3CORPORATE FINANCE
Statement for Calculation of Initial Outlay
New Project
Particulars Amount Amount
Report Cost 175000
Leasing Cost 115000
Private Placement cost 8000
Marketing expenses for
certificates 2130000
Tourism Expenses 175000
Total Initial Investment 2603000