WACC Calculation and Analysis

The provided content appears to be a collection of resources and references related to corporate finance, specifically focused on the weighted average cost of capital (WACC) calculation. The WACC is calculated as 6.52% and is referenced in various sources, including books and journals, as well as online resources. The assignment does not appear to have any specific instructions or requirements, but rather provides a collection of relevant materials for use in corporate finance research or analysis.

CORPORATE FINANCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
1 Evaluate potential investment...................................................................................................4
2 Assumptions on cash flow projection and discussion..............................................................6
3 Project evaluation method and their advantages as well as disadvantages.............................11
4 Sensitivity analysis and impact of results on decisions..........................................................13
5 Impact of discount rate on the project viability......................................................................17
6 Capital structure......................................................................................................................17
CONCLUSION..............................................................................................................................19
APPENDIX....................................................................................................................................20
(5)...................................................................................................................................................23
REFERENCES..............................................................................................................................26

INTRODUCTION
Corporate finance is a vast field under which various things are covered. The report that is prepared will address issues of
investment appraisal for the Wonder pump. In this regard lots of things are done in the present study. In the present report, projections
about the cash flows are made and on that basis project evaluation methods are applied to the cash flows. Along with this, in the
report, sensitivity analysis is also done, and its impact on the firm decisions is discussed in detail (Thiberirge, and Beresford, 2015).
Detail discussion is carried out on the various project evaluation methods in a systematic way and their merits and demerits are
discussed in detail. At the end of the report, weighted average cost of capital is computed and comments are made on same. Along
with this, an impact of capital structure on the discount rate is also discussed briefly.
1 Evaluate potential investment
Particular 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Volume (units) 200 300 500 600 500 400 250 150
Sales price 12,000 12,000
8
,000 8000 8000 8000 8000 8000
Sales
2,400,
000
3,600,
000
4,000,
000
4,800,
000
4,000,
000
3,200,
000
2,000,
000
1,200,
000
Cost of sale
5
,000
5
,000
5
,000
5
,000
5
,000
5
,000
5
,000
5
,000
Total cost of sale
-
1,000,000
-
1,500,000
-
2,500,000
-
3,000,000
-
2,500,000
-
2,000,000
-
1,250,000
-
750,000
Sub total
1,400,
000
2,100,
000
1,500,
000
1,800,
000
1,500,
000
1,200,
000
750,
000
450,
000

Sales
representative -250,000 -250,000 -100,000 -100,000 -100,000 -100,000 -100,000 -100,000
Technical support -150,000 -150,000 -50,000 -50,000 -50,000 -50,000 -50,000 -50,000
Total(b)
1,000,
000
1,700,
000
1,350,
000
1,650,
000
1,350,
000
1,050,
000
600,
000
300,
000
Tax
-
300,000
-
510,000
-
405,000
-
495,000
-
405,000
-
315,000
-
180,000
-
90,000
Total operating
cash flow
1,000,
000
1,400,
000
840,
000
1,245,
000
855,
000
645,
000
285,
000
120,
000 -
90,000
Investment cash
inflow(capex) -800,000
Inventories(fg) -50,000 50,000
Inventories raw
materials -300,000 -450,000 -750,000 -900,000 -750,000 -600,000 -375,000 -225,000
Change -300,000 -150,000 -300,000 -150,000 150,000 150,000 225,000 150,000 225,000
Trade receivables
-
394,521
-
591,781
-
657,534
-
789,041
-
657,534
-
526,027
-
328,767
-
197,260
Change
-
394,521
-
197,260
-
65,753
-
131,507
131,
507
131,
507
197,
260
131,
507
197,
260
Trade payables 49,315
73
,973
123,
288
147,
945
123,
288
98
,630
61
,644
36
,986
Change 24 49 24 - - - - -

49,315 ,658 ,315 ,658 24,658 24,658 36,986 24,658 36,986
Net cash flows
-
1,495,205
677,
397
1,083,
562
583,
151
1,501,
849
1,111,
849
1,030,
274
541,
849
555,
274 -
90,000
It can be seen from the table that sales revenue of the firm is increasing from the FY 2013 to 16 from 2,400,000 to 4,800,000 (Roberts
and Whited, 2012). Thereafter, sales of the firm is declining consistently from 4,800,000 to 1,200,000. This reflects that there is a
huge fluctuation in the sales value of the variable (Damodaran, 2010). Most of the times sales revenue of the business firm is declining
which is not good for the business.
Some assumptions in brief are given below.
 Inflation rate will be zero
 Research and development cost already paid.

2 Assumptions on cash flow projection and discussion
Payback
period
Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Net cash flow
-
1,495,205
67
7,397
1,08
3,562
58
3,151
1,50
1,849
1,11
1,849
1,03
0,274
541,
849
555,
274
-
90,000
Cumulative
cash flow
-
1,495,205
-
817,808
26
5,753
84
8,904
2,35
0,753
3,46
2,603
4,49
2,877
5,034,
726
5,590,
000
1 year
Payback period 0.75
1.75
ARR
Total profit
5,0
90,000
Number of year 8
Average profit
6
36,250
Total
investment
1,4
95,205
ARR 43%
Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
NPV
-
1,495,205
677,3
97
1,083
,562
583,1
51
1,501
,849
1,111
,849
1,030
,274
541,8
49
555,2
74 -
90,000
Discount
factors 1
0.8
93 0.797
0.7
12 0.636 0.567 0.507
0.4
52
0.4
04 0.3
61

PVs
-
1,495,205.48
604,818.
98
863,80
8.71
415,075.
14
954,45
2.39
630,89
3.16
521,96
8.86
245,105.
11
224,265.
84
-
32,454.9
0
NPV
2,93
2,728
IRR 57%
Discussion on assumptions made to prepare projections
 In comparison to the given data sales price is kept constant because it is expected that in future inflation rate will increase but at a
very slow rate. Hence, inflation rate is kept at 0.9%. This assumption is valid because with passage of time UK economy will
come on track which will lead to elevation in the demand of the product. Due to this reason there is strong possibility that at least
small elevation will be observed in the inflation rate. Hence, in order to remain competitive in the market and to retain old
customers in the business sales price is keep constant at 12,000 for all 8 years for which projection is prepared.
 It is assumed that sales of the firm product will increased by 10% on yearly basis. This assumption is made because firm is the
industry in which demand of the product which is pump does not increase at rapid pace (Abor and Bokpin, 2010). In comparison
to other sort of pumps firm product sales price is high. However, in terms of technology it is offered at reasonable price. On this
basis it can be said that sales of the firm will not increase at very high rate.
 Cost of capital is determined as 12% because as mentioned above firm is launching new product in the market and to what extent
it will be adopted by the people is not certain. Hence, it is very difficult for the banks to ascertain cash flows from the project.
Due to high level of uncertainty about the cash flows it is expected that banks will charge high percentage of interest on the firm
which is determined at 12%.
Payback period

Project investment will be payback in 1.7years it makes the investment interesting. It helps to take better investment decisions, in
which, initial investment can be recovered earlier and in shorter time period. The reason behind this is less payback period simply
means that project will take shorter period to get back their initially invested money or vice-versa. Company must choose project
if its payback period is shorter than target period or in case of two projects, less payback period project must be selected by an
investor.
ARR
ARR reflects the average return that can be earned on the project. Project ARR is 43% which is very high but profit based
calculation cannot be trusted because it takes into account both the cash plus credit transactions. For instance, credit sales will
not bring any cash money to the business, in such case; cash flows will remain same while profit will be increase. It can leads to
take misleading investment decisions. Due to this reason on the basis of this parameter project cannot be selected and assumed
viable for the firm.
NPV
NPV reflects the current value of the project which remain after subtracting cash expenditure from revenue. It may be either
positive or negative, first attract investor to put his money as it is a sign that project will bring profit to the business. On the
contrary to this, negative NPV denotes that project is not suitable and inevitable because the total present value of cash inflows
will be comparatively lower than money invested by the firm. Therefore, on the basis of this, it can be suggested and advised that
investor must choose that project which is favorable and indicates higher positive NPV. Referring the scenario, NPV of project is
293,278 which is positive demonstrates that it will bring positive return to the business, henceforth, project is viable and company
can invest their money.
IRR
IRR reflects real return that can be earned on the project. IRR of project is 57% which is higher than standard value which is
12%. On this ground it can be said that project is profitable for the firm.

3 Project evaluation method and their advantages as well as disadvantages
Evaluation of project evaluation techniques is given below.
Methods Advantages Disadvantages
Payback period  Simple –easy to understand.
 The main merit of this method is
that by using same time period
can be computed within which
investment amount can be
covered by the firm (Coles,
Lemmon and Meschke, 2012).
 Although the method makes use of
cash flows to measure PBP, but
still, it ignore post payback cash
inflows. However, in the real
corporate world, it might be
possible that a project that has a
shorter payback period but at the
same time, less cash inflows
during the remaining life of the
project may leads to take incorrect
decisions.
 The main limitation of this method
is that in this concept of present
value is not used. Hence, it can be
said that by using same payback
period from point of view of
current time period cannot be
computed.

ARR  Easy to accountants to
understand.
 The main benefit of ARR is that
it help project manager in
measuring average performance
of the project
 This method makes use of
profitability rather than cash
flows, henceforth; take into
account both the cash and credit
transactions and may lead to take
incorrect decisions (Eccles and
et.al., 2012).
 Differences in accounting policies
and provisions may also report
profitability in distinguish manner,
which is also a limitation of ARR.
 In this technique present value
concept is not used. Hence,
viability of the project in respect
to current time period cannot be
measured.
NPV  This is discounted cash flow. It
make use of a discounting factor
to quantify present value of
anticipated cash inflows and
compare it with the initial cash
outlay to measure net yield.
 It realize estimate in forecast of
cash flows. It can be complicated
for people to understand.
 NPV is the one of the main project

 The main merit of NPV method
is that in this approach present
value approach is used (Ernst
and Häcker, 2012). Thus,
viability of the project for
current time period can be easily
measured by the firm.
evaluation method that is used to
measure viability of the project. If
NPV of project is high then it is
assumed that project is profitable
for the company. On other hand, if
it is identified that NPV of the
project is low then it is assumed
that project is not profitable for the
firm.
IRR  Its include time value of money
and this is early compare to
discount rate to see value of
added.
 The main advantage of IRR is
that it reflects the real return that
can be gained on the project
(McNeil, Frey and Embrechts,
2015).
 It can have more than one IRR and
it ignore the size of cash flow.
 Limitation of project is that its
calculation is very complex and
individual with non-finance
background cannot make use of
this method.

Figure 1 Chart on payback period

Figure 2 Present values of cash flows
Critical analysis of project evaluation method
In comparison to payback period and average rate of return method project managers prefer to use NPV and IRR. The reason behind
this is both these are discounted methods that consider time value concept of money by incorporation use of an appropriate
discounting factor and helps to make viable investment decisions. This thing is not reflected by the payback period and ARR methods.
Hence, NPV and IRR is widely used in comparison to payback period and average rate of return method.
4 Sensitivity analysis and impact of results on decisions
(1)

Assumptions
 Due to Average price of pump 5000 euro sales price is assumed 5000.
 Sales Volume –due to tuff years concern beliefs sales volume would be lower.
(2)

Two scenarios are created under which in the first scenario volume units are increasing and thereafter it declined. On other
hand, in another scenario sales units are kept constant. It can be seen that in first scenario sharp fluctuation is observed in the net cash
flow. On other hand, when sales units are constant good amount of profit is earned. Hence, specific strategy must be followed under
which sales units must be keep constant.
5 Impact of discount rate on the project viability
Best pump
Beta 1.20
Debt 1.03
300.0
0 309.00
Equity 5.00
200.0
0 1000.00
Tax 0.30
Working 1.22
Beta(ungeared) 0.99
AGT
CAPM

Risk free rate 0.06
Marking return 0.12
Marking
premium 0.06
Cost of capital
11.92
%
Working note:

Beta (Ungeared) = Beta/Working
= (1.20/1.22)
= 0.99

Working = 1 + (Debt*(1-taxation rate)/Equity)
= (1 + (309*(1-0.30)/1000))
= 1.22
Market premium = Market return – risk free return
= 0.12 – 0.06
= 0.06
Cost of capital = Risk-free rate + (Beta ungeared * Market premium)
= (0.06 + (0.99*0.06)
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00
Net CF
-
1,495,205 677,397 1,083,562 583,151 1,501,849 1,111,849 1,030,274 541,849 555,274
-
90,000
Discount
factors 1.00 0.893 0.798 0.713 0.637 0.569 0.509 0.455 0.406 0.363
PVs
-
1495205.48 605,254 865,050 415,970 957,198 633,163 524,223 246,340 225,558
-
32,665
NPV 2,932,728
If projections that are made earlier will be used to do investment appraisal at discount rate of 11.92% than present value of the
project will improve. It can be said that project will be worthful for the company. In order to ensure that project will be worthwhile
company need to take debt at very low interest rate but in higher amount (Weighted average cost of capital, 2013). By doing so
weighted average cost of capital can be reduced and project can be made more worthwhile for the firm. It is very tough task to raise
debt from the market at low interest rate. This is because competition is very high in the industry and there is no guarantee that firm
will get expected success on sale of its product. Hence, there is very high probability that banks will provide debt at higher interest

rate. It can be observed that minimum at 5% debt is available to the business firms from the banks (Ryan, Buchholtz and Kolb, 2010).
Hence, below this level firm cannot expect availability of debt. Firm is for long time in the industry and during this time period it
manage to develop strong relationship with few banks. Hence, it can take debt at cheaper interest rates from the banks with which it
have good relations. Company can reduce portion of equity in its capital structure and by doing so also it can reduced weighted
average cost of capital. In this regard firm can buy back its shares from the shareholders ( Coleman, L., Maheswaran and Pinder,
2010). If risk will increase in terms of elevation in the discount rate then in that case project viability will reduce. If debt is taken at the
flexible discount rate than risk will enhance. Hence, firm must take debt at fixed interest rate which must be low. By doing so risk can
be reduced.
6 Capital structure
Relative merits of debt and equity financing
There are merits and demerits of debt and equity financing.
(a)Debt
Merits
 Debt is comparatively cheaper source of finance than equity financing, because it provides tax shields to the entity. As taxation
authority provides deduction in tax payable upto the extent of interest paid on debt capital. It helps to minimize taxation
obligations of the firm.
 The main benefit of using debt is that it helps firm in maintain its control on the business. When new shares are issued control
of main shareholders get diluted and new one influence their decisions. If AGT is using debt them it can maintain control
power of the existing shareholders. Thus, by doing so better business decisions can be made by the managers (Brealey and
et.al., 2012).
 The other merit of debt financing is that its cost of finance is very low in comparison to equity. Hence, firm can reduce its cost
of control to some extent.

Demerits
 It is necessary to pay interest in every condition even firm face loss in its business. Hence, sometime burden of finance cost
increase on business firm.
(b) Equity
Merits
 Company is not legally liable to pay continuously dividend to their investors like interest on debt. Thus, flexibility regards to
dividend payment is the main advantage of using equity funds, as in this case, if business earns adequate return on their
revenues than it can decide to distribute dividend, however, in case of loss, managers can take decisions to not distribute any
dividend to the shareholders.
Demerits
 On declaration and payment of dividend firm does not receive any deduction in tax. Cost of equity is already higher than debt.
Hence, sometime issue of equity prove costly for the firm.
 Dilution of control to the shareholders is another disadvantage of using equity financing. As investors will have voting rights
and they can attend board meetings and alter business decisions as well. Thus, it can be said that it limits managers freedom or
autonomy of business decisions.
Impact of capital structure on the discount rate
AGT capital-structure to great extent influence the discount rate. This is because in the weighted average cost of capital model
weight is given to the debt and equity in the capital structure. On that basis cost of capital is determined (Damodaran, 2016). Hence, it
can be said that capital structure to great extent influence the discount rate. It can be said that number of factors like beta, risk free rate
and firm shares price influence the weight of equity in WACC model. On other hand, value of debt and interest rate on same is used to
calculate cost of capital for the business firm. Thus, it is clear from the above discussion that capital structure to large extent affects
the discount rate.

Figure 3WACC at different discount rate
Capital structure greatly affects the discount rate. When interest rate increases firm earn low profit in its business because at
higher rate, company will be accountable to pay more interest to the debt holders as financial cost, which in turn, results in less return.
It must be noted that net profit is recorded in the equity section of the balance sheet (Baker and Martin, 2012). Thus, it can be said that
with reduction in net profit growth rate of equity in the capital structure decline. Due to elevation in proportion of debt in the capital
structure WACC increases. In this way capital structure affects the discount rate. Moreover, if interest rate on debt increases under
flexible interest rate then in that case also WACC increases. This is the second point which proved that capital structure greatly
influence the discount rate.

Figure 4 Modigilani miller theory
(Source: Baker and Martin, 2012)
As per Modigliani Millar model capital structure does not put any impact on the weighted average cost of capital of the
business firm. Even capital structure get changed WACC remain same. MM theory favors capital irrelevance theory as it assumes that
capital change in leverage does not have any impact upon WACC. The theory considers two approaches that are without tax and with
taxes. First approach assumes that corporate taxes does not exists, thus, due to the absence of tax benefits, any mix or composition of
debt and equity in capital structure doesn’t matter. However, on the other side, MM approach with tax indicates that leveraged firm is
more valuable because they can get tax benefits from the use of debt capital to meet out their long-term financial need. However, he
made some assumptions like there will be no tax, transaction cost, no bankruptcy cost and borrowing cost will be equal for both
investors and business firms. If these assumptions will happened really then only in that case this theory will prove correct in real
business world.

CONCLUSION
On the basis of above discussion it is concluded that opening a business is not a very easy task. It is very important to ensure that
projections are prepared in the right way. If same will be done in proper manner better decisions can be made by the business firm. It
is also concluded that project evaluation method is the one of the most important technique which is used to measure viability of the
project. Any project must not be choose by the project manager at his own discretion.

APPENDIX
(1)
Table 1 Assumption sheet
Assumption sheet
2013 2014 2015 2016 2017 2018 2019 2020 Total
Unit price 12000 12000 12000 12000 12000 12000 12000 12000 96000
Volume 200 220 242 266 293 322 354 390 2287
Cost per unit 5000 5005 5009 5014 5018 5023 5027 5032 40126.23
Sales person cost 250000 250000 100000 100000 100000 100000 100000 100000 1100000
Tech support workforce cost 150000 150000 50000 50000 50000 50000 50000 50000 600000
Tax rate 30%
Table 2 Projections
Projecti
ons
2013 2014 2015 2016 2017 2018 2019 2020 Total
Sales
2400
000
2640
000
290400
0
319440
0
3513
840
386522
4
4251
746
4676
921
27446
131
Less:
COGS
1000
000
1100
990
121217
8.98
133459
6.935
1469
378
161777
0.35
1781
149
1961
027
11477
090
Gross
profit
1400
000
1539
010
169182
1.02
185980
3.065
2044
462
224745
3.65
2470
597
2715
894
15969
041
Salesrep
2500
00
2500
00 100000 100000
1000
00 100000
1000
00
1000
00
11000
00
Teschsu
pport
1500
00
1500
00 50000 50000
5000
0 50000
5000
0
5000
0
60000
0
R&D
##
##
65000
0

Depreci
ation
1000
00
1000
00 100000 100000
1000
00 100000
1000
00
1000
00
80000
0
Total
5000
00
5000
00 250000 250000
2500
00 250000
2500
00
2500
00
31500
00
EBIT
9000
00
1039
010
144182
1.02
160980
3.065
1794
462
199745
3.65
2220
597
2465
894
12819
041
Less:
Tax
2700
00
3117
03 432546 482941
5383
38.6
599236
.094
6661
79.2
7397
68.1
38457
12
Net
profit
6300
00
7273
07
100927
4.71
112686
2.145
1256
123
139821
7.55
1554
418
1726
126
89733
29
Table 3Computation of ROI
Investment
CAPEX 800000
Inventories 350000
R&D 650000
Total investment 1800000
ROI 499%
Table 4 Calculation of payback period
Initial investment -1450000
Cash flows
2013 630000 -820000
2014 727307 -92693
2015 1009275 916582
2016 1126862 2043444
2017 1256123 3299567

2018 1398218 4697785
2019 1554418 6252203
2020 1726126 7978329
Table 5 Calculation of ARR
Initial investment 1450000
Cash flows
2013 630000
2014 727307
2015 1009275
2016 1126862
2017 1256123
2018 1398218
2019 1554418
2020 1726126
Total 9428329
Average 1178541
ARR 81%
Table 6 Calculation of NPV
Initial investment 1450000
Cash flows PV@12%
2013 630000 0.89286 562500
2014 727307 0.79719 579805
2015 1009275 0.71178 718382
2016 1126862 0.63552 716141

2017 1256123 0.56743 712758
2018 1398218 0.50663 708381
2019 1554418 0.45235 703140
2020 1726126 0.40388 697153
Sum 5398260
NPV 3948260
Table 7Calculation of IRR
Initial investment -1450000
2013 630000
2014 727307
2015 1009275
2016 1126862
2017 1256123
2018 1398218
2019 1554418
2020 1726126
IRR 58%
Table 8 Sensitivity analysis of profit
Cost
3000 4000 5000 6000 7000 8000 9000 10000 11000
8000 5000 4000 3000 2000 1000 0 -1000 -2000 -3000
9000 6000 5000 4000 3000 2000 1000 0 -1000 -2000
10000 7000 6000 5000 4000 3000 2000 1000 0 -1000
11000 8000 7000 6000 5000 4000 3000 2000 1000 0

Sales price 12000 9000 8000 7000 6000 5000 4000 3000 2000 1000
13000 10000 9000 8000 7000 6000 5000 4000 3000 2000
14000 11000 10000 9000 8000 7000 6000 5000 4000 3000
15000 12000 11000 10000 9000 8000 7000 6000 5000 4000
16000 13000 12000 11000 10000 9000 8000 7000 6000 5000
Table 9 Sensitivity analysis of present value at different discount rate
PV@6% PV@7% PV@8% PV@9% PV@10% PV@11% PV@12% PV@13% PV@14%
2013 630000 594340 588785 583333 577982 572727 567568 562500 557522.1 552631.6
2014 727307 647301 635258 623549 667254 601080 655232 579805 643634.5 559639.1
2015 1009275 847407 823869 801195 925940 758283 909256 718382 893163.5 681231.7
2016 1126862 892580 859678 828277 1033818 769662 1015191 716141 997223.1 667192.9
2017 1256123 938649 895599 854897 1152407 779954 1131643 712758 1111614 652391.2
2018 1398218 985688 931691 881114 1282768 789257 1259655 708381 1237361 637009.1
2019 1554418 1033777 968014 906988 1426072 797662 1400377 703140 1375591 621203.5
2020 1726126 1082993 1004621 932572 1583602 805250 1555068 697153 1527545 605109
Table 10 Sensitivity analysis of revenue at different growth rates
20% 25% 30% 35% 40% 45% 50% 55% 60%
2400000 2880000 3000000 3120000 3240000 3360000 3480000 3600000 3720000 3840000
(5)
Table 11CAPM model
CAPM
Assumptions
K(e) 26.00%

RFR 5.0%
Beta 1.40
R(m) 8 months 20%
Table 12 Computation of enterprises value
Enterprise
Value
(EV)
Current Market Price 7
Diluted Shares 10,000,000
Market Capitalization 74,100,000
Long Term Liabilities 20,000,000
Less: Cash & Cash
Equivalents -
Enterprise Value (in lacks) 94,100,000
Table 13 Calculation of WACC
Debt Equity Weightage
E/(D+E) @ Enterprise
Value 78.75%
D/(D+E) @ Enterprise
Value 21.25%

Interest Rate (%) 11%
Tax Rate (@) 30%
WACC Calculation
WACC 22.11%
(6)
Table 14 CAPM model
CAPM
Assumptions
K(e) 11.58%
RFR 2.1%
Beta 1.20
R(m) 8 months 10%
Table 15 Calculation of enterprise value
Enterprise
Value
(EV)
Current Market Price 500
Diluted Shares 400,000
Market Capitalization 200,000,000

Long Term Liabilities 300,000,000
Less: Cash & Cash Equivalents 4,164
Enterprise Value (in lacks) 499,995,836
Table 16 Calculation of WACC
Debt Equity Weightage
E/(D+E) @ Enterprise
Value 40.00%
D/(D+E) @ Enterprise
Value 60.00%
Interest Rate (%) 5%
Tax Rate (@) 30%
WACC Calculation
WACC 6.52%

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Online
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[Accessed on 21st November 2016].