Scribd
Upload
28 views

Year 1 Year 2 Estimated Revenue

The projected cashflow statement shows that in Year 1 the estimated revenue is RM400000 with a net income of RM15000. In Year 2 the estimated revenue increases to RM460000 with a net income of RM42000. The capital budgeting analysis shows that the internal rate of return is less than 15% so the project is not accepted. The net present value is also negative so the project is not accepted based on that method. However, the payback period is at Year 4, so the project would be accepted using the payback method.

Uploaded by

Al Muzammil Muhamad
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
28 views

Year 1 Year 2 Estimated Revenue

The projected cashflow statement shows that in Year 1 the estimated revenue is RM400000 with a net income of RM15000. In Year 2 the estimated revenue increases to RM460000 with a net income of RM42000. The capital budgeting analysis shows that the internal rate of return is less than 15% so the project is not accepted. The net present value is also negative so the project is not accepted based on that method. However, the payback period is at Year 4, so the project would be accepted using the payback method.

Uploaded by

Al Muzammil Muhamad
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
You are on page 1/ 4

CAPLOCK SDN BHD

PROJECTED CASHFLOW STATEMENT

Year 1
Estimated Revenue :
Projected Sales
Less :
Estimated Expenses :
Variable Costs
Fixed Costs
Depreciation
Total Expenses

Year 2
400000

460000

160000
100000
120000
380000

184000
100000
120000
404000

Projected Income Before Tax


Less : Corporation Tax
Estimated Project Net Income

20000
5000
15000

55999.9999999999
14000
42000

Net Cashflows :
Estimated Project Net Income
Add Back : Depreciation
Total Cash Flow

15000
120000
135000

42000
120000
162000

CAPITAL BUDGETING ALTERNATIVES


Initial Cost
Cashflow
Year 1
Year 2
Year 3
Year 4
Year 5
Discount Rate

INITIAL RATE OF RETURN


DECISION : Not accept the project because IRR is less than 15%

NET PRESENT VALUE


DECISION : Not accept the project because NPV is negative

PAYBACK METHOD

Payback Period
Year 1
Year 2
Year 3
Year 4
Year 5

Annual Cashflow
Accumulated Cashflow
135000
135000
162000
297000
203400
500400
265500
765900
358650
1124550

Decision : Accept the project since the project's payback period is at year 4

OCK SDN BHD


ASHFLOW STATEMENT
Project Cost :
Depreciation rate :
Year 4

Year 3

800000
15%
Year 5

552000

690000

897000

220800
100000
120000
440800

276000
100000
120000
496000

358800
100000
120000
578800

111200
27800
83399.9999999999

194000
48500
145500

318200
79550
238650

83399.9999999999
120000
203400

145500
120000
265500

238650
120000
358650

RM
(800000)
135000
162000
203400
265500
358650
10%

11%

13462.51

Initial Cost
Recoup Investment

Recoup Investment

800000

You might also like