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    Case 1

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    imi.imtenan
    The document shows projections for 7 potential investment projects including investments, cash flows, net present values, internal rates of return, and payback periods. Project 3 has the highest NPV of $8,000 and IRR of 11.33%, while Project 2 has the shortest payback period of 2 years but negative NPV. Overall, the analysis suggests that Project 3 provides the best financial returns on investment.

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    Case 1

    Uploaded by

    imi.imtenan
    8 views4 pages
    The document shows projections for 7 potential investment projects including investments, cash flows, net present values, internal rates of return, and payback periods. Project 3 has the highest NPV of $8,000 and IRR of 11.33%, while Project 2 has the shortest payback period of 2 years but negative NPV. Overall, the analysis suggests that Project 3 provides the best financial returns on investment.

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    © © All Rights Reserved

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    The document shows projections for 7 potential investment projects including investments, cash flows, net present values, internal rates of return, and payback periods. Project 3 has the highest NPV of $8,000 and IRR of 11.33%, while Project 2 has the shortest payback period of 2 years but negative NPV. Overall, the analysis suggests that Project 3 provides the best financial returns on investment.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    8 views4 pages

    Case 1

    Uploaded by

    imi.imtenan
    The document shows projections for 7 potential investment projects including investments, cash flows, net present values, internal rates of return, and payback periods. Project 3 has the highest NPV of $8,000 and IRR of 11.33%, while Project 2 has the shortest payback period of 2 years but negative NPV. Overall, the analysis suggests that Project 3 provides the best financial returns on investment.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 4

    Project No.

    1 2 3 4 5 6 7
    Investment (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000)

    Year (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000)


    1 330 1,666 - 160 280 2,200 1,200
    2 330 334 - 200 280 900
    3 330 165 - 350 280 300
    4 330 - 395 280 90
    5 330 - 432 280 70
    6 330 - 440 280
    7 330 - 442 280
    8 1,000 - 444 280
    9 - 446 280
    10 - 448 280
    11 - 450 280
    12 - 451 280
    13 - 451 280
    14 - 452 280
    15 10,000 (2,000) 280

    Sum of Cash Flow Benefits 3,310 2,165 10000 3,561 4,200 2200 2,560
    Excess of cash flow 1,310 165 8,000 1,561 2,200 200 560
    Rate 0.1
    Outflow 2000 2000 2000 2000 2000 2000 2000

    PV $2,073.09 $1,914.55 $2,393.92 $2,228.22 $2,129.70 $2,000.00 $2,165.04


    NPV $73.09 ($85.45) $393.92 $228.22 $129.70 $0.00 $165.04
    Payback Period 6.06 2.00 14.2 6.0522727 7.1428571 0.9090909 1.8888889
    IRR 10.87% 6.31% 11.33% 12.33% 11.12% 10.00% 15.26%
    Profitability Index 1.04 0.96 1.20 1.11 1.06 1.00 1.08
    8
    (2,000)

    (2,000)
    (350)
    (60)
    60
    350
    700
    1,200
    2,250

    4,150
    2,150

    2000

    $2,182.98
    $182.98
    6.0444444
    11.41%
    1.09
    Years 2007 2008 2009 2010 2011 2012 2013
    Sales Revenue 0 4000 10000 10000 10000 10000 10000
    NWC 400 1000 1000 1000 1000 1000
    Incremental NWC 400 600 0 0 0 0

    Sales Revenue 4000 10000 10000 10000 10000 10000


    Operating Saving 2000 3500 3500 3500 3500 3500
    COGS (75%) 3000 7500 7500 7500 7500 7500
    SGA 200 500 500 500 500 500
    Depreciation 3000 3000 3000 3000 3000 3000
    Total Cost 6200 11000 11000 11000 11000 11000

    EBIT -200 2500 2500 2500 2500 2500


    Tax -80 1000 1000 1000 1000 1000
    NOPAT -120 1500 1500 1500 1500 1500
    Add back Dep 3000 3000 3000 3000 3000 3000
    Investment Construction -16000 -2000 0 0 0 0 0
    Investment WC -400 -600 0 0 0 0
    Total Investment -16000 -2400 -600 0 0 0 2080
    FCF -16000 480 3900 4500 4500 4500 6580

    WACC 9.61 0.0961


    PV $16,857.16
    NPV $857.16
    Total debt 3000
    total equity 12000
    Total L&E 15000

    %debt 0.2
    %equity 0.8

    cost of debt 5.38%


    cost equity 11.2
    0.6 after tax
    WACC 9.6056 0.096
    PV $16,863.24
    npv $863.24

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