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Problems in Cash Flow Management

JIMS C-702 Ankur Wahal

with base rate of 9. Suppose that the expected FCFF for the first seven years of project life are the following: Year FCFF 1 100 2 105 3 107 4 107 5 105 6 105 7 105 Show the debt Schedule with: 1.a).25% spread.Problem 1 A term loan of 300 Cr pays an interest rate of (3. Equated 2. Structured Repayment schedules .25% p.

Problem 2 Project value 100 cr. Equity 15% and debt 85% Capex 4 installments 250 cr. for the project life Prepare the FCFE available for the equity shareholders . at the end of each year in periods 1-4 The debt is further divided into the following structure: Senior Debt 100% with repayments in 10 years and interest rate of 7% Subordinate Debt 0% with repayments in 5 years and interest rate of 12% The Project will generate steady cash flow of 14 cr.

Problem 3 Project value 100 cr. for the project life Prepare the FCFE available for the equity shareholders . at the end of each year in periods 1-4 The debt of 85% is further divided into the following structure: Senior Debt 75% with repayments in 10 years and interest rate of 7% Subordinate Debt 10% with repayments in 5 years and interest rate of 12% The Project will generate steady cash flow of 14 cr. Equity 15% and debt 85% Capex 4 installments 250 cr.

at the end of each year in periods 1-4 Working Capital requirement is 3% of the Project Cost and bears an interest of 7% The debt of 85% is further divided into the following structure: Senior Debt 75% with repayments in 10 years and interest rate of 7% Subordinate Debt 10% with repayments in 5 years and interest rate of 12% The Project will generate steady Profits of 14 cr.Problem 4 Project value 100 cr. Equity 15% and debt 85% Capex 4 installments 250 cr. for the project life Prepare the FCFE available for the equity shareholders .

Calculate the IRR.Problem 5 A project whose value is 200 cr. 5% fixed rate is amortized in constant Principal repayment of 5 years. The Term Loan Project is 100 cr.5 cr p.a. starts operations at T0. Tax rate is 30%. considering that the first 5 years of Project will generate EBITDA of 7. Calculate: Net income and cash flows for the sponsors in the 5 years of operating life. .

with debt repayment is equated for 10 years with bearing base interest rate of 7% with 3% spread.Problem 6 The revenue and operating costs for a Project of 4000 cr are given below: 0 Rev Op costs 1 1125 175 2 1175 175 3 1225 175 4 840 175 5 855 175 6 865 175 7 885 175 8 895 175 9 925 175 10 925 175 The depreciation schedule is as follows: 0 Dep 1 20% 2 20% 3 20% 4 10% 5 10% 6 10% 7 10% Debt Equity ratio is 80:20. The tax rate is 33% Prepare the income statement and the cash flows and calculate the IRRs .

calculate: 1. the amortizing schedule of the loan during the period 4-8 Assuming from the operating year the company generates a steady cash flow of about 1000 cr.000 cr.Problem 7 A Special Purpose Vehicle starts in T0 a 5. For next 5 years. the outstanding amount of the loan at the end of year 3. financed with a D/E ratio of 1:1. 4 5 6 7 8 15% 15% 20% 20% 30% 100% . Then Calculate the IRR. 2. project. The amortization of the outstanding loan at the end of year 3 starts at the end of year 4 and will be completed at the end of year 8 according to the following percentages of principal repayment: Year End Based on the information provided. Interest rate on the loan is floating rate but swapped against a 10% fixed interest rate. The schedule of payments during construction is the following: Year 0 Year 1 Year 2 Year 3 10% 25% 40% 25% 100% Every payment during the construction period is financed based on the agreed D/E ratio.