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MULTINATIONAL CAPITAL BUDGETING

a-I
1
1a
1b
2a
2b
3
4a
4b
5
6
7

Demand total
Mahawangsa Demand
Other Demand
Price per Unit to mahawangsa
Price per unit to other
Total Revenue = (1)x(2)
Variable cost not manufacturing in malaysia per unit
Variable cost manufacturing in malaysia
Total Variable cost = (1)x(4)
Annual Lease Expense
Other fixed annual expenses

8 Noncash expenses (depreciation)


9 Total expenses = (5)+(6)+(7)+(8)
10 Before Tax Earnings of subsidiary = (3)-(9)
11
12
13
14
15
16
17
18
19
20
21
22

Host Government Tax (15%)


After Tax Earnings of subsidiary = (10) - (11)
Net Cash Flow to subsidiary = (12) + (8)
MYR remitted by subsidiary (100% of net cash flow)
Withholding tax on remitted funds (5%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)
Racket of course should to establish a subsdiary in Malaysia

Ye
0

1
400,000.00
400,000.00
200.00

2
400,000.00
###
200.00

3
400,000.00
400,000.00
200.00

80,000,000.00
120.00
98.00
44,040,000.00

80,000,000.00
129.60
105.84
47,563,200.00

80,000,000.00
139.97
114.31
51,368,256.00

1,500,000.00

1,620,000.00

1,749,600.00

1,500,000.00
47,040,000.00
32,960,000.00

1,500,000.00
50,683,200.00
29,316,800.00

1,200,000.00
54,317,856.00
25,682,144.00

4,944,000.00
28,016,000.00
29,516,000.00
29,516,000.00
1,475,800.00
28,040,200.00

4,397,520.00
24,919,280.00
26,419,280.00
26,419,280.00
1,320,964.00
25,098,316.00

3,852,321.60
21,829,822.40
23,029,822.40
23,029,822.40
1,151,491.12
21,878,331.28

0.0250
701,005.00
584,170.83

###
627,457.90
435,734.65

0.0250
546,958.28
316,526.78

(290,829.17)

144,905.49

461,432.27

875,000.00

Year
4
400,000.00
400,000.00
200.00

5
500,000.00
400,000.00
100,000.00
200.00

6
500,000.00
###
100,000.00
200.00

7
800,000.00
400,000.00
400,000.00
200.00

80,000,000.00
151.17
123.45
55,477,716.48

300.00
110,000,000.00
163.26
133.33
76,241,801.32

301.08
110,108,000.00
176.32
143.99
82,341,145.42

302.16
200,864,000.00
190.42
155.51
146,055,912.68

1,889,568.00

2,040,733.44

2,203,992.12

2,380,311.48

1,200,000.00
58,567,284.48
21,432,715.52

1,200,000.00
79,482,534.76
30,517,465.24

1,200,000.00
85,745,137.54
24,362,862.46

1,200,000.00
149,636,224.17
51,227,775.83

3,214,907.33
18,217,808.19
19,417,808.19
19,417,808.19
970,890.41
18,446,917.78

4,577,619.79
25,939,845.46
27,139,845.46
27,139,845.46
1,356,992.27
25,782,853.18

3,654,429.37
20,708,433.09
21,908,433.09
21,908,433.09
1,095,421.65
20,813,011.44

7,684,166.37
43,543,609.46
44,743,609.46
44,743,609.46
2,237,180.47
42,506,428.98

0.0250
461,172.94
222,402.08

0.0253
651,017.04
261,629.15

0.0258
536,091.66
179,536.01

0.0265
1,128,035.77
314,814.08

683,834.35

945,463.49

1,124,999.51

1,439,813.59

8
800,000.00
400,000.00
400,000.00
200.00
303.24
201,296,000.00
205.66
167.95
157,740,385.70
2,570,736.40
1,000,000.00
161,311,122.10
39,984,877.90
5,997,731.68
33,987,146.21
34,987,146.21
34,987,146.21
1,749,357.31
33,237,788.90
55,000,000.00
0.0276
2,436,735.35
566,706.76
2,006,520.35

a-II

MULTINATIONAL CAPITAL BUDGETING

1
1a
1b
2a
2b
3
4a
4b
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

AL BUDGETING

Demand total
Mahawangsa Demand
Other Demand
Price per Unit to mahawangsa
Price per unit to other
Total Revenue = (1)x(2)
Variable cost not manufacturing in malaysia per unit
Variable cost manufacturing in malaysia
Total Variable cost = (1)x(4)
Annual Lease Expense
Other fixed annual expenses
Noncash expenses (depreciation)
Total expenses = (5)+(6)+(7)+(8)
Before Tax Earnings of subsidiary = (3)-(9)
Host Government Tax (15%)
After Tax Earnings of subsidiary = (10) - (11)
Net Cash Flow to subsidiary = (12) + (8)
MYR remitted by subsidiary (100% of net cash flow)
Withholding tax on remitted funds (5%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

Racket of course should still renew the agreement with Mahawangsa because Racket will receive b

1
400,000.00
400,000.00
200.00

2
400,000.00
###
200.00

80,000,000.00
120.00
98.00
44,040,000.00

80,000,000.00
129.60
105.84
47,563,200.00

1,500,000.00

1,620,000.00

1,500,000.00
47,040,000.00
32,960,000.00

1,500,000.00
50,683,200.00
29,316,800.00

4,944,000.00
28,016,000.00
29,516,000.00
29,516,000.00
1,475,800.00
28,040,200.00

4,397,520.00
24,919,280.00
26,419,280.00
26,419,280.00
1,320,964.00
25,098,316.00

0.0250
701,005.00
584,170.83

###
627,457.90
435,734.65

(290,829.17)

144,905.49

875,000.00

hawangsa because Racket will receive better NPV

Year
3
400,000.00
400,000.00
200.00

4
400,000.00
###
200.00

5
200,000.00
15,000.00
185,000.00
201.08

6
###
###
185,000.00
202.16

80,000,000.00
139.97
114.31
51,368,256.00

80,000,000.00
151.17
123.45
55,477,716.48

300.00
58,516,200.00
163.26
133.33
27,264,198.76

301.08
58,732,200.00
176.32
143.99
29,445,334.66

1,749,600.00

1,889,568.00

2,040,733.44

2,203,992.12

1,200,000.00
54,317,856.00
25,682,144.00

1,200,000.00
58,567,284.48
21,432,715.52

1,200,000.00
30,504,932.20
28,011,267.80

1,200,000.00
32,849,326.77
25,882,873.23

3,852,321.60
21,829,822.40
23,029,822.40
23,029,822.40
1,151,491.12
21,878,331.28

3,214,907.33
18,217,808.19
19,417,808.19
19,417,808.19
970,890.41
18,446,917.78

4,201,690.17
23,809,577.63
25,009,577.63
25,009,577.63
1,250,478.88
23,759,098.75

3,882,430.98
22,000,442.24
23,200,442.24
23,200,442.24
1,160,022.11
22,040,420.13

0.0250
546,958.28
316,526.78

###
461,172.94
222,402.08

0.0253
599,917.24
241,093.29

0.0258
567,706.67
190,123.82

461,432.27

683,834.35

924,927.63

1,115,051.45

7
300,000.00
15,000.00
285,000.00
203.24

8
###
###
285,000.00
204.32

302.16
89,164,200.00
190.42
155.51
50,843,453.31

303.24
89,488,200.00
205.66
167.95
54,910,929.57

2,380,311.48

2,570,736.40

1,200,000.00
54,423,764.79
34,740,435.21

1,000,000.00
58,481,665.97
31,006,534.03

5,211,065.28
29,529,369.93
30,729,369.93
30,729,369.93
1,536,468.50
29,192,901.43
0.0265
774,721.33
216,210.50

4,650,980.10
26,355,553.92
27,355,553.92
27,355,553.92
1,367,777.70
25,987,776.23
55,000,000.00
0.0276
2,236,522.24
520,143.59

1,331,261.95

1,851,405.54

Using Renew Agreement CAPITAL BUDGET


(Favorable)
0
S$ remitted after withholding taxes
(Including salvage value) S$
Weak - MYR Scenario
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of cash flows (20% disc rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

1
28,040,200.00

0.0250

0.0240
672,964.80
560,804.00

875,000.00
(314,196.00)

Year
2

25,098,316.00

21,878,331.28

18,446,917.78

25,782,853.18

20,813,011.44

0.0221
555,134.59
385,510.13

0.0196
428,135.86
247,763.81

0.0166
306,602.82
147,860.16

0.0136
349,413.34
140,421.38

0.0106
220,785.64
73,940.66

71,314.13

319,077.94

466,938.10

607,359.48

681,300.15

Racket wil lost about MYR. 1.112.650,00, but still receive positive N

4,950,000.00

7
42,506,428.98

4,450,000.00

88,237,788.90
3,950,000.00

0.0080
338,835.69
94,562.82

0.0058
507,409.99
118,007.35

775,862.97

893,870.32

t still receive positive NPV

3,450,000.00

2,950,000.00
Weak MYR
2,450,000.00

1,950,000.00

1,450,000.00

950,000.00

450,000.00

(50,000.00)

Main Scenario
MYR

International Coorporate Governance and Control

6
7
8

2a
1
1a
1b
2a
2b
3
4
5
6
7
8
9
10
11
12
13

14
15
16
17
18
19
20
21
22

2b

nternational Coorporate Governance and Control


Data
Initial investment MYR
spot rate/ MYR 1
Initial investment US$
Price MYR
Demand singapore (units)
Variable cost/ unit MYR
Leasing office space cost MYR/ year
Other Annual oVerhead expense cost MYR/ year
Depreciation MYR/year
Tax Rate on income
Remitted to holding
Remmited withholding tax
Exchange rate/ MYR1
Salvage Value MYR (end of 4 year)
rate of return

Demand total
Mahawangsa Demand
Other Demand
Price per Unit to mahawangsa
Price per unit to other
Total Revenue = (1)x(2)
Variable cost per unit
Total Variable cost = (1)x(4)
Annual Lease Expense
Other fixed annual expenses
Noncash expenses (depreciation)
Total expenses = (5)+(6)+(7)+(8)
Before Tax Earnings of subsidiary = (3)-(9)
Host Government Tax (15%)
After Tax Earnings of subsidiary = (10) - (11)
Net Cash Flow to subsidiary = (12) + (8)

MYR remitted by subsidiary (100% of net cash flow)


Withholding tax on remitted funds (10% last three years)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)
Racket of course should to acquaire Alor Star

If Established
If Acquisition
maksimum Fikri possible pay

60,000,000.00 (including 35000000 for plant)


0.025
1,500,000.00
300.00
800,000.00

###
###

220.00

###

2,500,000.00
15%

15%

1
800,000.00

2
800,000.00

15%
100%
10%
0.025
80,000,000.00
20%

300.00

324.00

240,000,000.00
220.00
176,000,000.00

259,200,000.00
237.60
190,080,000.00

2,500,000.00

2,700,000.00

5,250,000.00
183,750,000.00
56,250,000.00

5,250,000.00
198,030,000.00
61,170,000.00

8,437,500.00
47,812,500.00
53,062,500.00

9,175,500.00
51,994,500.00
57,244,500.00

53,062,500.00

57,244,500.00

53,062,500.00

57,244,500.00

0.0250
1,326,562.50
1,105,468.75

###
1,431,112.50
993,828.13

1,500,000.00
(394,531.25)

80,260,814.04
207,130,074.32
126,869,260.28

599,296.88

300.00
800,000.00

300.00
800,000.00

300.00
800,000.00

220.00

220.00

220.00

12%

12%

12%

4
800,000.00

5
800,000.00

Year
3
800,000.00

349.92

377.91

408.15

279,936,000.00
256.61
205,286,400.00

302,330,880.00
277.14
221,709,312.00

326,517,350.40
299.31
239,446,056.96

2,916,000.00

3,149,280.00

3,401,222.40

4,200,000.00
212,402,400.00
67,533,600.00

4,200,000.00
229,058,592.00
73,272,288.00

4,200,000.00
247,047,279.36
79,470,071.04

10,130,040.00
57,403,560.00
61,603,560.00

10,990,843.20
62,281,444.80
66,481,444.80

11,920,510.66
67,549,560.38
71,749,560.38

61,603,560.00

66,481,444.80

71,749,560.38

61,603,560.00

66,481,444.80

71,749,560.38

0.0250
1,540,089.00
891,255.21

0.0250
1,662,036.12
801,522.05

0.0250
1,793,739.01
720,863.48

1,490,552.08

2,292,074.13

3,012,937.61

300.00
800,000.00

300.00
800,000.00

###
###

220.00

220.00

###

12%

12%

10%

6
800,000.00

7
800,000.00

8
800,000.00

440.80

476.06

514.15

352,638,738.43
323.25
258,601,741.52

380,849,837.51
349.11
279,289,880.84

411,317,824.51
377.04
301,633,071.31

3,673,320.19

3,967,185.81

4,284,560.67

4,200,000.00
266,475,061.71
86,163,676.72

4,200,000.00
287,457,066.65
93,392,770.86

3,500,000.00
309,417,631.98
101,900,192.53

12,924,551.51
73,239,125.21
77,439,125.21

14,008,915.63
79,383,855.23
83,583,855.23

15,285,028.88
86,615,163.65
90,115,163.65

77,439,125.21
7,743,912.52
69,695,212.69

83,583,855.23
8,358,385.52
75,225,469.71

0.0254
1,768,516.02
592,272.44

0.0261
1,966,541.17
548,825.55

90,115,163.65
9,011,516.37
81,103,647.29
80,000,000.00
0.0273
4,403,942.45
1,024,216.26

3,605,210.05

4,154,035.60

5,178,251.86

MULTINATIONAL CAPITAL BUDGETING

6
7
8

a-II
1
1a
1b
2a
2b
3
4a
5
6
7
8
9
10
11
12
13

14
15
16
17
18
19
20
21
22

AL BUDGETING
Data
Initial investment MYR
spot rate/ MYR 1
Initial investment UMYR
Price MYR
Demand singapore (units)
Variable cost/ unit MYR
Leasing office space cost MYR/ year
Other Annual oVerhead expense cost MYR/ year
Depreciation MYR/year
Tax Rate on income
Remitted to holding
Remmited withholding tax
Exchange rate/ MYR1
Salvage Value MYR (end of 4 year)
rate of return

Demand total
Mahawangsa Demand
Other Demand
Price per Unit to mahawangsa
Price per unit to other
Total Revenue = (1)x(2)
Variable cost not manufacturing in malaysia per unit
Total Variable cost = (1)x(4)
Annual Lease Expense
Other fixed annual expenses
Noncash expenses (depreciation)
Total expenses = (5)+(6)+(7)+(8)
Before Tax Earnings of subsidiary = (3)-(9)
Host Government Tax (15%)
After Tax Earnings of subsidiary = (10) - (11)
Net Cash Flow to subsidiary = (12) + (8)

MYR remitted by subsidiary (100% of net cash flow)


Withholding tax on remitted funds (5%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

Racket of course should still renew the agreement with Mahawangsa because Racket will receive b

35,000,000.00 (including 10000000 for plant)


0.025
875,000.00
200.00
400,000.00

###
###

120.00

###

1,500,000.00
15%

15%

1
400,000.00
400,000.00
200.00

2
400,000.00
###
200.00

80,000,000.00
120.00
#REF!

80,000,000.00
129.60
#REF!

2,500,000.00

2,700,000.00

1,500,000.00
#REF!
#REF!

1,500,000.00
#REF!
#REF!

#REF!
#REF!
#REF!

#REF!
#REF!
#REF!

15%
100%
5%
0.025
55,000,000.00
20%

#REF!

#REF!

#REF!

#REF!

0.0250
#REF!
#REF!

###
#REF!
#REF!

#REF!

#REF!

875,000.00

hawangsa because Racket will receive better NPV

200.00
400,000.00

###
###

200.00
500,000.00

###
###

120.00

###

120.00

###

12%

12%

12%

12%

4
400,000.00
###
200.00

5
200,000.00
15,000.00
185,000.00
201.08

6
###
###
185,000.00
202.16

80,000,000.00
139.97
#REF!

80,000,000.00
151.17
#REF!

300.00
58,516,200.00
163.26
#REF!

301.08
58,732,200.00
176.32
#REF!

2,916,000.00

3,149,280.00

3,401,222.40

3,673,320.19

1,200,000.00
#REF!
#REF!

1,200,000.00
#REF!
#REF!

1,200,000.00
#REF!
#REF!

1,200,000.00
#REF!
#REF!

#REF!
#REF!
#REF!

#REF!
#REF!
#REF!

#REF!
#REF!
#REF!

#REF!
#REF!
#REF!

Year
3
400,000.00
400,000.00
200.00

#REF!

#REF!

#REF!

#REF!

#REF!

#REF!

#REF!

#REF!

0.0250
#REF!
#REF!

###
#REF!
#REF!

0.0253
#REF!
#REF!

0.0258
#REF!
#REF!

#REF!

#REF!

#REF!

#REF!

200.00
800,000.00

###
###

120.00

###

12%

10%

7
300,000.00
15,000.00
285,000.00
203.24

8
###
###
285,000.00
204.32

302.16
89,164,200.00
190.42
#REF!

303.24
89,488,200.00
205.66
#REF!

3,967,185.81

4,284,560.67

1,200,000.00
#REF!
#REF!

1,000,000.00
#REF!
#REF!

#REF!
#REF!
#REF!

#REF!
#REF!
#REF!

#REF!

#REF!

#REF!
0.0265
#REF!
#REF!

#REF!
55,000,000.00
0.0276
#REF!
#REF!

#REF!

#REF!

3a

Country Risk Analysis

Analysis of Project Based on a 6% withholding tax, salvage value 20 mio ; Fik

14
15
16
17
18
19
20
21
22

Analysis of Project Based on a 11% withholding tax, salvage value 20 mio ; F

14
15
16
17
18
19
20
21
22

Analysis of Project Based on a 6% withholding tax, salvage value 50 mio ; Fik

14
15
16
17
18
19
20
21
22

Analysis of Project Based on a 11% withholding tax, salvage value 20 mio ; F

14
15
16
17
18
19
20
21
22

Summary of Estimated NPVs across the possible scenarios ; spartan inc


Scenario
1
2
3
4

3b
3c

0%

Yes of course, because there is reason to refuse the offer from malaysian gov

ountry Risk Analysis

nalysis of Project Based on a 6% withholding tax, salvage value 20 mio ; Fikri established subsidiary
0
MYR remitted by subsidiary (100% of net cash flow)
Withholding tax on remitted funds (6%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

875,000.00
-

nalysis of Project Based on a 11% withholding tax, salvage value 20 mio ; Fikri established subsidiary

MYR remitted by subsidiary (100% of net cash flow)


Withholding tax on remitted funds (11%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

0
875,000.00
-

nalysis of Project Based on a 6% withholding tax, salvage value 50 mio ; Fikri established subsidiary
0
MYR remitted by subsidiary (100% of net cash flow)
Withholding tax on remitted funds (6%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

875,000.00
-

nalysis of Project Based on a 11% withholding tax, salvage value 20 mio ; Fikri established subsidiary
0

MYR remitted by subsidiary (100% of net cash flow)


Withholding tax on remitted funds (11%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

875,000.00
-

ummary of Estimated NPVs across the possible scenarios ; spartan inc


Withholding tax imposed by singapore government
Salvage value
6%
20000000
11%
20000000
6%
50000000
11%
50000000

probability project NPV will be negative

es of course, because there is reason to refuse the offer from malaysian government, Its showing by the data

stablished subsidiary
Year
1
29,516,000.00
1,770,960.00
27,745,040.00
0.0250
693,626.00
578,021.67
(296,978.33)

2
26,419,280.00
1,585,156.80
24,834,123.20
0.0250
620,853.08
431,147.97
134,169.64

3
23,029,822.40
1,381,789.34
21,648,033.06
0.0250
541,200.83
313,194.92
447,364.56

4
19,417,808.19
1,165,068.49
18,252,739.70
0.0250
456,318.49
220,061.00
667,425.56

established subsidiary
Year
1
29,516,000.00
3,246,760.00
26,269,240.00
0.03
656,731.00
547,275.83
(327,724.17)

2
26,419,280.00
2,906,120.80
23,513,159.20
0.03
587,828.98
408,214.57
80,490.40

3
23,029,822.40
2,533,280.46
20,496,541.94
0.03
512,413.55
296,535.62
377,026.02

4
19,417,808.19
2,135,958.90
17,281,849.29
0.03
432,046.23
208,355.63
585,381.65

stablished subsidiary
Year
1
29,516,000.00
1,770,960.00
27,745,040.00
0.03
693,626.00
578,021.67
(296,978.33)

2
26,419,280.00
1,585,156.80
24,834,123.20
0.03
620,853.08
431,147.97
134,169.64

3
23,029,822.40
1,381,789.34
21,648,033.06
0.03
541,200.83
313,194.92
447,364.56

4
19,417,808.19
1,165,068.49
18,252,739.70
0.03
456,318.49
220,061.00
667,425.56

established subsidiary
Year
1

29,516,000.00
3,246,760.00
26,269,240.00
0.03
656,731.00
547,275.83
(327,724.17)

NPV
1,755,119.52
1,622,051.98
1,947,794.37
1,814,726.84

26,419,280.00
2,906,120.80
23,513,159.20
0.03
587,828.98
408,214.57

23,029,822.40
2,533,280.46
20,496,541.94
0.03
512,413.55
296,535.62

19,417,808.19
2,135,958.90
17,281,849.29
0.03
432,046.23
208,355.63

80,490.40

377,026.02

585,381.65

Probability
(20%)(15%)
(80%)(15%)
(20%)(85%)
(80%)(85%)

NPVscenario
3.00%
52,653.59
12.00%
194,646.24
17.00%
331,125.04
68.00%
1,234,014.25
1,812,439.12

ment, Its showing by the data either established or acquisition give positive NPV

ear
5
27,139,845.46
1,628,390.73
25,511,454.73
0.0253
644,164.23
258,875.16
926,300.72

6
21,908,433.09
1,314,505.99
20,593,927.11
0.0258
530,448.59
177,646.16

7
44,743,609.46
2,684,616.57
42,058,992.89
0.0265
1,116,161.71
311,500.25

8
34,987,146.21
2,099,228.77
32,887,917.44
20,000,000.00
0.0276
1,460,529.09
339,672.39

1,103,946.88

1,415,447.13

1,755,119.52

6
21,908,433.09
2,409,927.64
19,498,505.45
0.03
502,233.24
168,196.90

7
44,743,609.46
4,921,797.04
39,821,812.42
0.03
1,056,791.41
294,931.09

8
34,987,146.21
3,848,586.08
31,138,560.13
20,000,000.00
0.03
1,412,219.62
328,437.15

1,293,614.84

1,622,051.98

ear
5
27,139,845.46
2,985,383.00
24,154,462.46
0.03
609,900.18
245,105.20
830,486.85

998,683.75

ear
5
27,139,845.46
1,628,390.73
25,511,454.73
0.03
644,164.23
258,875.16
926,300.72

6
21,908,433.09
1,314,505.99
20,593,927.11
0.03
530,448.59
177,646.16
1,103,946.88

7
44,743,609.46
2,684,616.57
42,058,992.89
0.03
1,116,161.71
311,500.25
1,415,447.13

8
34,987,146.21
2,099,228.77
32,887,917.44
50,000,000.00
0.03
2,288,995.69
532,347.24
1,947,794.37

ear

27,139,845.46
2,985,383.00
24,154,462.46
0.03
609,900.18
245,105.20

21,908,433.09
2,409,927.64
19,498,505.45
0.03
502,233.24
168,196.90

44,743,609.46
4,921,797.04
39,821,812.42
0.03
1,056,791.41
294,931.09

34,987,146.21
3,848,586.08
31,138,560.13
50,000,000.00
0.03
2,240,686.22
521,112.00

830,486.85

998,683.75

1,293,614.84

1,814,726.84

is ENPV

Analysis of Project Based on a 6% withholding tax, salvage value 20 mio ; Fikri acquaire Alor Star

14
15
16
17
18
19
20
21
22

MYR remitted by subsidiary (100% of net cash flow)


Withholding tax on remitted funds (6%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

Analysis of Project Based on a 11% withholding tax, salvage value 20 mio ; Fikri established subsid

14
15
16
17
18
19
20
21
22

MYR remitted by subsidiary (100% of net cash flow)


Withholding tax on remitted funds (11%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

Analysis of Project Based on a 6% withholding tax, salvage value 50 mio ; Fikri established subsidi

14
15
16
17
18
19
20
21
22

MYR remitted by subsidiary (100% of net cash flow)


Withholding tax on remitted funds (6%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

Analysis of Project Based on a 11% withholding tax, salvage value 20 mio ; Fikri established subsid

14
15
16
17
18
19
20
21
22

MYR remitted by subsidiary (100% of net cash flow)


Withholding tax on remitted funds (11%)
MYR remitted after withholding taxes = (14) - (15)
Salvage Value
Exchange rate of MYR
Cash Flow to Parent (US$)
PV of parent cash flows (20% discount rate) (US$)
Initial investment by parent (US$)
Cumulative NPV (US$)

Summary of Estimated NPVs across the possible scenarios ; spartan inc


Scenario Withholding tax imposed by singapore government
1
6%
2
11%
3
6%
4
11%

Racket of course should to acquaire Alor Star

ue 20 mio ; Fikri acquaire Alor Star


Year
0
1,500,000.00
-

1
53,062,500.00
3,183,750.00
49,878,750.00

2
57,244,500.00
3,434,670.00
53,809,830.00

3
61,603,560.00
3,696,213.60
57,907,346.40

0.025
1,246,968.75
1,039,140.63

0.025
1,345,245.75
934,198.44

0.025
1,447,683.66
837,779.90

473,339.06

1,311,118.96

(460,859.38)

lue 20 mio ; Fikri established subsidiary


Year
0
1,500,000.00
-

1
53,062,500.00
5,836,875.00
47,225,625.00
0.025
1,180,640.63
983,867.19
(516,132.81)

2
57,244,500.00
6,296,895.00
50,947,605.00
0.025
1,273,690.13
884,507.03
368,374.22

3
61,603,560.00
6,776,391.60
54,827,168.40
0.025
1,370,679.21
793,217.14
1,161,591.35

ue 50 mio ; Fikri established subsidiary


Year
0
1,500,000.00
-

1
53,062,500.00
3,183,750.00
49,878,750.00
0.025
1,246,968.75
1,039,140.63
(460,859.38)

2
57,244,500.00
3,434,670.00
53,809,830.00
0.025
1,345,245.75
934,198.44
473,339.06

3
61,603,560.00
3,696,213.60
57,907,346.40
0.025
1,447,683.66
837,779.90
1,311,118.96

lue 20 mio ; Fikri established subsidiary


Year
0

1,500,000.00
-

Salvage value
NPV
20000000
20000000
50000000
50000000

53,062,500.00
5,836,875.00
47,225,625.00
0.025
1,180,640.63
983,867.19
(516,132.81)

4,599,657.42
4,281,970.85
4,790,382.38
4,472,695.82

57,244,500.00
6,296,895.00
50,947,605.00
0.025
1,273,690.13
884,507.03

61,603,560.00
6,776,391.60
54,827,168.40
0.025
1,370,679.21
793,217.14

368,374.22

1,161,591.35

Probability
(20%)(15%)
(80%)(15%)
(20%)(85%)
(80%)(85%)

3.00%
12.00%
17.00%
68.00%

Year
4
66,481,444.80
3,988,886.69
62,492,558.11

5
71,749,560.38
4,304,973.62
67,444,586.76

6
77,439,125.21
4,646,347.51
72,792,777.70

7
83,583,855.23
5,015,031.31
78,568,823.92

0.025
1,562,313.95
753,430.73

0.025
1,686,114.67
677,611.67

0.025
1,847,116.73
618,595.66

0.026
2,053,943.00
573,217.80

2,064,549.68

2,742,161.35

3,360,757.01

3,933,974.81

4
66,481,444.80
7,312,958.93
59,168,485.87
0.025
1,479,212.15
713,354.62

5
71,749,560.38
7,892,451.64
63,857,108.74
0.025
1,596,427.72
641,568.50

6
77,439,125.21
8,518,303.77
68,920,821.44
0.025
1,748,865.84
585,691.63

7
83,583,855.23
9,194,224.08
74,389,631.16
0.026
1,944,690.72
542,727.49

1,874,945.98

2,516,514.47

3,102,206.11

3,644,933.59

5
71,749,560.38
4,304,973.62
67,444,586.76
0.025
1,686,114.67
677,611.67
2,742,161.35

6
77,439,125.21
4,646,347.51
72,792,777.70
0.025
1,847,116.73
618,595.66
3,360,757.01

7
83,583,855.23
5,015,031.31
78,568,823.92
0.026
2,053,943.00
573,217.80
3,933,974.81

Year

Year
4
66,481,444.80
3,988,886.69
62,492,558.11
0.025
1,562,313.95
753,430.73
2,064,549.68

Year
4

66,481,444.80
7,312,958.93
59,168,485.87
0.025
1,479,212.15
713,354.62

71,749,560.38
7,892,451.64
63,857,108.74
0.025
1,596,427.72
641,568.50

77,439,125.21
8,518,303.77
68,920,821.44
0.025
1,748,865.84
585,691.63

83,583,855.23
9,194,224.08
74,389,631.16
0.026
1,944,690.72
542,727.49

1,874,945.98

2,516,514.47

3,102,206.11

3,644,933.59

NPVscenario
137,989.72
513,836.50
814,365.01
3,041,433.16
4,507,624.38 is ENPV

8
90,115,163.65
5,406,909.82
84,708,253.83
20,000,000.00
0.027
2,862,313.37
665,682.61
4,599,657.42

8
90,115,163.65
9,912,668.00
80,202,495.65
20,000,000.00
0.027
2,739,143.60
637,037.26
4,281,970.85

8
90,115,163.65
5,406,909.82
84,708,253.83
50,000,000.00
0.027
3,682,395.82
856,407.58
4,790,382.38

90,115,163.65
9,912,668.00
80,202,495.65
50,000,000.00
0.027
3,559,226.05
827,762.22
4,472,695.82