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    Practice Problems 2

    Uploaded by

    Divyam Garg
    1) The document presents cash flow information for two potential projects over several years. 2) Project 1 has a positive NPV of Rs. 2,604.99 and is recommended for consideration. 3) Project 2 has a positive NPV of Rs. 48,017,157.55 and is also recommended based on the provided information.

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    Practice Problems 2

    Uploaded by

    Divyam Garg
    29 views9 pages
    1) The document presents cash flow information for two potential projects over several years. 2) Project 1 has a positive NPV of Rs. 2,604.99 and is recommended for consideration. 3) Project 2 has a positive NPV of Rs. 48,017,157.55 and is also recommended based on the provided information.

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    Financial Analysis

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    practice problems 2

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    1) The document presents cash flow information for two potential projects over several years. 2) Project 1 has a positive NPV of Rs. 2,604.99 and is recommended for consideration. 3) Project 2 has a positive NPV of Rs. 48,017,157.55 and is also recommended based on the provided information.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    29 views9 pages

    Practice Problems 2

    Uploaded by

    Divyam Garg
    1) The document presents cash flow information for two potential projects over several years. 2) Project 1 has a positive NPV of Rs. 2,604.99 and is recommended for consideration. 3) Project 2 has a positive NPV of Rs. 48,017,157.55 and is also recommended based on the provided information.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 9

    Q9)

    YR 0 1 2 3
    REV 7000 7000 7000
    COST(-) 2000 2000 2000
    INV(-) 10000
    DEP(-) 2500 2500 2500

    PBT 2500 2500 2500

    TAX(34%) (-) 850 850 850

    a. PAT-> NET PROFIT 1650 1650 1650


    b. OCF-> PAT+DEP 4150 4150 4150

    NPV 2604.99978849958 2604.9997885 CONSIDER THE PROJECT

    Q8)
    I0 32000000
    yr 4
    dep per yr 8000000
    tax 34%

    price 400
    labour cost per hour 15
    inc per yr 2%

    energy cost per unit 5


    inc per yr 3%

    r 8%

    yr 0 1 2 3
    rev 40,000,000 80,000,000 80,000,000
    inv -32000000
    lab cost 30000000 30600000 31212000
    energy cost 1000000 1030000 1060900

    dep 8000000 8000000 8000000

    pbt 1,000,000 40,370,000 39,727,100

    tax 340,000 13,725,800 13,507,214

    pat 660,000 26,644,200 26,219,886


    ocf 8,660,000 34,644,200 34,219,886
    npv 48,017,157.55

    Q7)
    no of bottles 2,000,000 M no. of yrs 5
    price/bottle 2.5
    cost/bottle 0.7

    sales income inc 7%


    costs inc 5%

    r 10%
    tax 34%

    yr 1 2 3 4
    rev 5,000,000 5,350,000 5,350,000 5,350,000
    cost 1,400,000 1,470,000 1,470,000 1,470,000

    pbt 3,600,000 3,880,000 3,880,000 3,880,000


    tax 1,224,000 1,319,200 1,319,200 1,319,200
    pat 2,376,000 2,560,800 2,560,800 2,560,800

    NPV ₹ 9,539,446.76

    Q6)
    yr
    I0 60000 0
    yr 5 1
    cost 2000 2
    dep 12000 3
    4
    tax 35% 5
    r 18%

    Q5) YR CF DSCT FACTOR DCF


    0 -45000 1 -45000
    1 -5000 0.892857142857 -4464.285714286
    2 -5000 0.797193877551 -3985.969387755
    3 1600 0.711780247813 1138.848396501
    2.401831268222 -52311.40670554
    SUM DF SUM DCF

    EAC -21779.80085349 OR NPV


    EAC

    ₹ 21,779.80

    Q4) TAMPER A TAMPER B DCF @12%


    1 0
    COST INITIAL 600000 750000 0.892857142857 1
    YRS 5 7 0.797193877551 2
    ANNUAL COST 110000 90000 0.711780247813 3
    0.635518078405 4
    NPV ₹ 996,525.38 ₹ 1,160,738.09 0.567426855719 5
    0.506631121177 6
    EAC ₹ -276,445.84 ₹ -254,338.30 0.452349215337 7
    GO WITH THIS
    DF SUMS EAC
    3.604776202345 ₹ 276,445.84

    4.563756538859 ₹ 254,338.30

    Q2) MIXER X

    YR CF DISCT FACTOR DCF


    0 -400000 1 -400000
    1 120000 0.900900900901 108108.1081081
    2 120000 0.811622433244 97394.69198929
    3 120000 0.731191381301 87742.96575611
    4 120000 0.658730974145 79047.7168974
    5 120000 0.593451328059 71214.15936703

    DF SUM 3.695897017649

    NPV 43507.64211794 ₹ 43,507.64


    ₹ 43,507.64
    EAB 11771.87619411

    ₹ -11,771.88
    Q1)

    cost of equipm 200,000


    no of yrs 5
    discnt rate 12%

    price/ unit 25
    cost/ unit 5
    no of units 100000
    tax 25%

    rev 2500000
    cogs 500000
    dep 40000
    fixed cost 350000

    pbt 1610000

    tax 402500

    pat 1207500
    ocf 1247500
    NPV
    pv of cf ₹ 4,496,958.31 4,296,958
    4
    7000
    2000

    2500

    2500

    850

    1650
    4150

    DER THE PROJECT

    4
    60,000,000

    31836240
    1092727

    8000000

    19,071,033

    6,484,151

    12,586,882
    20,586,882
    5
    5,350,000
    1,470,000

    3,880,000
    1,319,200
    2,560,800 ocf

    cf (outflow) dsct factordcf


    60000 1 60000
    2000 0.847458 1694.9152542
    2000 0.718184 1436.3688595
    2000 0.608631 1217.2617454
    2000 0.515789 1031.5777503
    2000 0.437109 874.21843246

    pv cost 66254.34
    pv disct factor 3.127171

    EAC 21186.67

    DSCT RATE R 12%


    DEP -15000
    TAX 34%
    ₹ -52,311.41
    ₹ -21,779.80

    MIXER Y
    YR CF DF DCF
    0 -600000 1 -600000
    1 130000 0.900900900900901 117117.117117
    2 130000 0.811622433244055 105510.916322
    3 130000 0.73119138130095 95054.8795691
    4 130000 0.658730974145 85635.0266389
    5 130000 0.593451328058559 77148.6726476
    6 130000 0.534640836088791 69503.3086915
    7 130000 0.481658410890803 62615.5934158
    8 130000 0.433926496298021 56410.4445187

    DF SUM 5.14612276092708
    NPV 68995.9589205204

    13407.3674736999
    SELECTED!!!
    `
    EAB DIRECTLY WITH 2 COLMNS

    NPV ₹ 68,995.96
    EAB ₹ 13,407.37

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