year

EBDIT
1
2
3
4
5

10000
10692
12769
13462
20385

DEPN
EBIT
INT
10000
0
10000
692
10000
2769
10000
3462
10000
10385

EBT
0
0
0
0
0

TAX
0
692
2769
3462
10385

0
242.2
969.15
1211.7
3634.75

PAT
0
449.8
1799.85
2250.3
6750.25
11250.2

DEPN
10000
10000
10000
10000
10000

CALCULATION
COST
SCRAP
YEARS
DEPN

50000
0
5
10000

AR
AI
2250.04
25000

CAPITAL BUDGETTING

PAT+ DEPN
PVIF @10%
10000
0.909090909 9090.91
10449.8
0.826446281 8636.20
11799.85
0.751314801 8865.40
12250.3
0.683013455 8367.12
16750.25
0.620921323 10400.59
61250.2 CASH INFLOW
45360.22
CASH OUTFLOW

ROI

10000
20449.8
32249.65
44499.95
61250.2

50000

NPV

-4639.78 <0

REJECT

PI

0.907204 <1

REJECT

ARR
0.0900016

cu

9.00016

PBP
0.328353

year
1
2
3
4
5

PAT+ DEPN
PVIF @6%
10000
10449.8
11799.85
12250.3
16750.25

year
0.94
0.89
0.84
0.79
0.75

9433.962
9300.285
9907.382
9703.385
12516.76

cash inflow
cash outflow

50861.77
50000

npv

-861.775

1
2
3
4
5

PAT+ DEPN
10000
10449.8
11799.85
12250.3
16750.25

PVIF @7%
0.93
0.87
0.82
0.76
0.71

9345.7944
9127.26
9632.1925
9345.6952
11942.697

cash inflow
cash outflow

49393.639
50000

npv

606.36111

QUES(2) AN IRON ORE COMPANY IS CONSIDERING INVESTING IN A NEW PROFESSING FACILITY THE COMPANY EXTRACTS ORE

COST
LAC
EQUIPMENT
W/C

100
10
110

ITY THE COMPANY EXTRACTS ORES FROM A OPEN PIT MINE DURING A YEAR 1 LAC TONES OF ORES IS EXTRACTED IF THE OP FOM THE EXT

XTRACTED IF THE OP FOM THE EXTRACTION PROCESS IS SOLD IMMEDIATELTY A PRICE OF 1000 PER TON OF ORE CAN BE OBTAINED THE C

OF ORE CAN BE OBTAINED THE COMPANY HAS ESTIMATED THAT ITS EXTRACTION COST AMMOUNT TO 70% POF THE NET REALISABLE VA

70% POF THE NET REALISABLE VALUE OF THE ORE . AN ALTERNATIVE TO SOLD ALL THE ORE AT 1000 PER TON IT IS POSSIBLE TO PROCES

ER TON IT IS POSSIBLE TO PROCESS FURTHER 25% OF THE O/P THE ADDITIONAL COST OF FURTHER PROCESSING WOULD BE RS 100 PER TO

CESSING WOULD BE RS 100 PER TON. THE PROPOSED ORE WILL YIELD 80% OF FINAL O/P AND WILL CAN BE SOLD AT 1600 PER TON.

N BE SOLD AT 1600 PER TON.

CASH FLOWS
PARTICULARS
REVENUE
COST
EBDIT
DEPN
EBT
TAX
PAT
PAT+DEPN
PVIF@15
PV
WC

NOS
100000
25000

1
2
3
4
5
7000000 7000000 7000000 7000000 7000000
2500000 2500000 2500000 2500000 2500000
4500000 4500000 4500000 4500000 4500000
2000000 1600000 1280000 1024000
0
2500000 2900000 3220000 3476000 4500000
875000 1015000 1127000 1216600 1575000
1625000 1885000 2093000 2259400 2925000
3625000 3485000 3373000 3283400 2925000
0.869565 0.756144 0.657516 0.571753 0.497177
3152174 2635161 2217802 1877295 1454242 11336673
497176.7 11833850 PVCI
10000000 PVCO
1833850 >0

0.25
0.8

HENCE WE WILL USE THE EQU

25000
20000

1000 25000000
1600 32000000
7000000

HENCE WE WILL USE THE EQUIPMENT.

SALVAGE VALUE
12331027 PVCI
11000000 PVCO
1331027 >0

DEPN
YEARS

W.D
1
2
3
4
5

DEPN
100
80
64
51.2
40.96

20
16
12.8
10.24

ques (doc)
CASH FLOWS
PARTICULARS
REVENUE
COST
EBDIT
DEPN
EBT
TAX
PAT
PAT+DEPN
PVIF@15
PV
WC

cost
working capital
working capital

600
150
100 0.657516 65.75162
815.7516

years
1
2
3
4
5
6

capacity quantity yr
33.33
399960
66.67
800040
90 1080000
100 1200000
100 1200000
100 1200000

1
2
3
4
5
6

79992000
160008000
216000000
240000000
240000000
240000000

revenue
cost
31996800 24000000
64003200 36000000
86400000 48000000
96000000 48000000
96000000 48000000
96000000 48000000

ebdit

depn
80
280
384
480
480
480

200
133.333
88.888
59.259
39.506
26.337

ebt
-120
146.667
295.112
420.741
440.494
453.663

tax@35
-42
51.33345
103.2892
147.2594
154.1729
158.7821

pat
-78
95.33355
191.8228
273.4817
286.3211
294.881

pat+depn pvif@15%
122
228.6666
280.7108
332.7407
325.8271
321.218

yr

wdv
1
2
3
4
5
6

600
400
266.666667
177.777778
118.518519
79.0123457
52.6748971

dpn
200
133.3333
88.88889
59.25926
39.50617
26.33745

salvage
wdv

tax@35
net value

60
53
7
2.45
57.55

250

307.55