Scribd
Upload
47 views8 pages

Practice Problem

The document contains financial information for multiple investments including initial costs, revenues, expenses, profits, and cash flows projected over multiple years. It also includes calculations for net present value (NPV), internal rate of return (IRR), yield, price, cost of equity, cost of debt, and weighted average cost of capital (WACC) for different projects. The information suggests the projects generated positive cash flows and profits in early years with NPVs indicating overall profitable investments.

Uploaded by

Divyam Garg
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
47 views8 pages

Practice Problem

The document contains financial information for multiple investments including initial costs, revenues, expenses, profits, and cash flows projected over multiple years. It also includes calculations for net present value (NPV), internal rate of return (IRR), yield, price, cost of equity, cost of debt, and weighted average cost of capital (WACC) for different projects. The information suggests the projects generated positive cash flows and profits in early years with NPVs indicating overall profitable investments.

Uploaded by

Divyam Garg
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/ 8

Initial Investment 32,000,000.

00
Depreciation 8,000,000.00

Labour Cost 15 15.3 15.606 15.91812


Energy Cost 5 5.15 5.3045 5.463635
0 1 2 3 4
Sales 40,000,000.00 80,000,000.00 80,000,000.00 60,000,000.00
Labour Cost -30,000,000.00 -30,600,000.00 -31,212,000.00 -31,836,240.00
Energy Cost -1,000,000.00 -1,030,000.00 -1,060,900.00 -1,092,727.00
Contribution 9,000,000.00 48,370,000.00 47,727,100.00 27,071,033.00
depreciation 8,000,000.00 8,000,000.00 8,000,000.00 8,000,000.00
EBIT 1,000,000.00 40,370,000.00 39,727,100.00 19,071,033.00
Tax @ 34% 340,000.00 13,725,800.00 13,507,214.00 6,484,151.22
EAT 660,000.00 26,644,200.00 26,219,886.00 12,586,881.78
Add Depreciation 8,000,000.00 8,000,000.00 8,000,000.00 8,000,000.00
Cash Flow 8,660,000.00 34,644,200.00 34,219,886.00 20,586,881.78

NPV 48,017,157.55
Year 0 1 2 3 4
Investment -10000
Sales 7000 7000 7000 7000
operating cost 2000 2000 2000 2000
5000 5000 5000 5000
Depreciation 2500 2500 2500 2500
EBT 2500 2500 2500 2500
TAX @34% 850 850 850 850
EAT 1650 1650 1650 1650
Depreciation 2500 2500 2500 2500
Cash Flow 4150 4150 4150 4150

NPV ₹ 2,605.00

Increamental 0
Q1 Principal 1000 Q2 Principal 1000
Term 20 40 Coupon Rate 8%
Coupon Rate 8% 0.04 Semi annual
Semi annual 40
Yield 0.12
Yield 8% 10% 6% 6%
4% 5% 3% Time 20
Price ₹ 1,000.00 ₹ 828.41 ₹ 1,231.15 40
Par Discount Premium Price ₹ 699.07

Q3 Principal 1000 Assume Q4 Dividend 1 2


Term 20 40 Growth 5%
Coupon Rate 8% 0.04 Ke 12%
Semi annual 40
market price to Yield 10% 0.05 Po 28.571429
PV ₹ -828.41 P10 46.539846

Q5 Dividend 1 2.36 Q6 A
Growth 1.5% Rate 10%
Ke 7.5% FV 1000
Time 20
Po 39.333333 Coupon Paymen 100
Yield 10%
Prices ₹ 1,000.00
Yield 12%
Prices ₹ 850.61
Q7 Rate 8% Yield 8%
FV 1000 Prices ₹ 1,196.36
Time 20
Coupon Payment 80
Prices ₹ 1,200.00
Yield 6%
Prices ₹ 950.00
Yield 9%
0.04 10% 0.05
40 50

12%
6%
15
30 Year Div P0
₹ 862.35 0 28.57143
1 2 30
2 2.1 31.5
3 2.205 33.075
4 2.31525 34.72875
5 2.431013 36.46519
6 2.552563 38.28845
7 2.680191 40.20287
8 2.814201 42.21301
9 2.954911 44.32366
10 3.102656 46.53985
11 3.257789

B
10%
1000
10
100
10%
₹ 1,000.00
12%
₹ 887.00
8%
₹ 1,134.20
Q8 Earning 20 Q9 Po 20 Q10 Po 22
ROE 14% D1 1 D1 0.88
b 0.6 P1 22 P1 23.54
growth 8.40%
Dividend Yield 5% Dividend Yield 4%
Earning 1 21.68 Ke 15% Ke 11%
Expected capital gain 10%

Q13 D0 2.25 Q14 D0 6 Q15 Beta 1.3


Ke 16% P 62 Rf 7%
G 7.0% G 4% Rp 9.50%
D1 2.4075 D1 6.24 Ke 19.35%
P 26.75 Ke 14.06%

Q17 Debt 1 No of Shares 20 Value


Beta 1.29 equity 1 Q18 P 25 500
Rf 7% Total 2 debt MV 0.95
RM 13.00% Kd 10% 171
RP 6.00% Ke 20%
Ke 14.74% KO 9.65% Kd after tax 6.0%
Ko 16.43%
Cost of debt 7%
After Tax 4.55%
Q11 D 2 Q12 Dividend Yield 1.50%
Ke 15% Ke 8%
G 6.5%
Po 13.3333333333333

Q16 Beta 1.15 Debt 0.25


Rf 6% equity 1
Rp 10.00% Total 1.25
Ke 17.50%
Kd 0.039 Ko 0.1478

Q19 intial Investment 25 kd 9% 5.85% 0.75 0.428571


Estimated life 5 ke 15% 1 0.571429
Cash flow 7 ko 12.43%

NPV -0.03
Reject

You might also like