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Plato Pharmaceuticals

Initial cost $ 100,000


Selling Unit 150000
Selling Price/Unit $ 6
Tenure 5
Variable Cost/Unit $ 3
Fixed Cost $ 200,000
Machinery Cost $ 520,000
Depreciation (CCA) 30%
Income Tax 40%
Salvage $ 100,000
Market Interest rate 12%

CCA 30%
year
0 $ - ### $ 520,000
1 $ 520,000 $ 78,000 $ 442,000
2 $ 442,000 $ 132,600 $ 309,400
3 $ 309,400 $ 92,820 $ 216,580
4 $ 216,580 $ 64,974 $ 151,606
5 $ 151,606 $ 45,482 $ 106,124

Year 0 1 2 3 4
Income Statement
Revenue $ 900,000 $ 900,000 $ 900,000 $ 900,000
Expenses
Fixed Cost $ 200,000 $ 200,000 $ 200,000 $ 200,000
Variable Cost $ 450,000 $ 450,000 $ 450,000 $ 450,000
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974

Taxable income $ 172,000 $ 117,400 $ 157,180 $ 185,026


Tax (40%) $ 68,800 $ 46,960 $ 62,872 $ 74,010

Net Income $ 103,200 $ 70,440 $ 94,308 $ 111,016

Cash Flow Statement


Operations
Net Income $ 103,200 $ 70,440 $ 94,308 $ 111,016
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974
Investment Activities
Machinery Cost $ (520,000)
Salvage
Disposal Tax
Working Capital $ (100,000)

Net Cash Flow $ (620,000) $ 181,200 $ 203,040 $ 187,128 $ 175,990

NPV $ 102,256.31
IRR 18%
aceuticals

$ 900,000

$ 200,000
$ 450,000
$ 45,482

$ 204,518
$ 81,807

$ 122,711

$ 122,711
$ 45,482

$ 100,000
$ 2,449.68

$ 270,642

Submitted By:
Jayal Yadav
Sukhpreet Sahota
Gurkirat Singh
Shamsher Singh
Plato Pharmaceuticals

Initial cost $ 100,000


Selling Unit 150000
Selling Price/Unit $ 6
Tenure 5
Variable Cost/Unit $ 3
Fixed Cost $ 200,000
Machinery Cost $ 650,000
Depreciation (CCA) 30%
Income Tax 40%
Salvage $ 100,000
Market Interest rate 12%

CCA 30%
year
0 $ - ### $ 650,000
1 $ 650,000 $ 97,500 $ 552,500
2 $ 552,500 $ 165,750 $ 386,750
3 $ 386,750 $ 116,025 $ 270,725
4 $ 270,725 $ 81,218 $ 189,508
5 $ 189,508 $ 56,852 $ 132,655

Year 0 1 2 3 4
Income Statement
Revenue $ 900,000 $ 900,000 $ 900,000 $ 900,000
Expenses
Fixed Cost $ 200,000 $ 200,000 $ 200,000 $ 200,000
Variable Cost $ 450,000 $ 450,000 $ 450,000 $ 450,000
CCA $ 97,500 $ 165,750 $ 116,025 $ 81,218

Taxable income $ 152,500 $ 84,250 $ 133,975 $ 168,783


Tax (40%) $ 61,000 $ 33,700 $ 53,590 $ 67,513

Net Income $ 91,500 $ 50,550 $ 80,385 $ 101,270

Cash Flow Statement


Operations
Net Income $ 91,500 $ 50,550 $ 80,385 $ 101,270
CCA $ 97,500 $ 165,750 $ 116,025 $ 81,218
Investment Activities
Machinery Cost $ (650,000)
Salvage
Disposal Tax
Working Capital $ (100,000)

Net Cash Flow $ (750,000) $ 189,000 $ 216,300 $ 196,410 $ 182,487

NPV $ 9,129.88
IRR 12%

Answer

New Machinery Cost $ 650,000.00


% Change in Cost 25.00%
uticals

$ 900,000

$ 200,000
$ 450,000
$ 56,852

$ 193,148
$ 77,259

$ 115,889

$ 115,889
$ 56,852

$ 100,000
$ 13,062.10

$ 285,803
Plato Pharmaceuticals

Initial cost $ 100,000


Selling Unit 150000
Selling Price/Unit $ 6
Tenure 5
Variable Cost/Unit $ 3
Fixed Cost $ 245,000
Machinery Cost $ 520,000
Depreciation (CCA) 30%
Income Tax 40%
Salvage $ 100,000
Market Interest rate 12%

CCA 30%
year
0 $ - ### $ 520,000
1 $ 520,000 $ 78,000 $ 442,000
2 $ 442,000 $ 132,600 $ 309,400
3 $ 309,400 $ 92,820 $ 216,580
4 $ 216,580 $ 64,974 $ 151,606
5 $ 151,606 $ 45,482 $ 106,124

Year 0 1 2 3 4
Income Statement
Revenue $ 900,000 $ 900,000 $ 900,000 $ 900,000
Expenses
Fixed Cost $ 245,000 $ 245,000 $ 245,000 $ 245,000
Variable Cost $ 450,000 $ 450,000 $ 450,000 $ 450,000
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974

Taxable income $ 127,000 $ 72,400 $ 112,180 $ 140,026


Tax (40%) $ 50,800 $ 28,960 $ 44,872 $ 56,010

Net Income $ 76,200 $ 43,440 $ 67,308 $ 84,016

Cash Flow Statement


Operations
Net Income $ 76,200 $ 43,440 $ 67,308 $ 84,016
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974
Investment Activities
Machinery Cost $ (520,000)
Salvage
Disposal Tax
Working Capital $ (100,000)

Net Cash Flow $ (620,000) $ 154,200 $ 176,040 $ 160,128 $ 148,990

NPV $ 4,927.35
IRR 12%

Answer

New Fixed Cost 245000


% Change in Cost 22.50%
uticals

$ 900,000

$ 245,000
$ 450,000
$ 45,482

$ 159,518
$ 63,807

$ 95,711

$ 95,711
$ 45,482

$ 100,000
$ 2,449.68

$ 243,642
Plato Pharmaceuticals

Initial cost $ 100,000


Selling Unit 150000
Selling Price/Unit $ 6
Tenure 5
Variable Cost/Unit $ 3.3
Fixed Cost $ 200,000
Machinery Cost $ 520,000
Depreciation (CCA) 30%
Income Tax 40%
Salvage $ 100,000
Market Interest rate 12%

CCA 30%
year
0 $ - ### $ 520,000
1 $ 520,000 $ 78,000 $ 442,000
2 $ 442,000 $ 132,600 $ 309,400
3 $ 309,400 $ 92,820 $ 216,580
4 $ 216,580 $ 64,974 $ 151,606
5 $ 151,606 $ 45,482 $ 106,124

Year 0 1 2 3 4
Income Statement
Revenue $ 900,000 $ 900,000 $ 900,000 $ 900,000
Expenses
Fixed Cost $ 200,000 $ 200,000 $ 200,000 $ 200,000
Variable Cost $ 495,000 $ 495,000 $ 495,000 $ 495,000
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974

Taxable income $ 127,000 $ 72,400 $ 112,180 $ 140,026


Tax (40%) $ 50,800 $ 28,960 $ 44,872 $ 56,010

Net Income $ 76,200 $ 43,440 $ 67,308 $ 84,016

Cash Flow Statement


Operations
Net Income $ 76,200 $ 43,440 $ 67,308 $ 84,016
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974
Investment Activities
Machinery Cost $ (520,000)
Salvage
Disposal Tax
Working Capital $ (100,000)

Net Cash Flow $ (620,000) $ 154,200 $ 176,040 $ 160,128 $ 148,990

NPV $ 4,927.35
IRR 12%

Answer

New Variable cost 3.3


% Change in Cost 10.00%
uticals

$ 900,000

$ 200,000
$ 495,000
$ 45,482

$ 159,518
$ 63,807

$ 95,711

$ 95,711
$ 45,482

$ 100,000
$ 2,449.68

$ 243,642
Plato Pharmaceuticals

Initial cost $ 100,000


Selling Unit 150000
Selling Price/Unit $ 5.7
Tenure 5
Variable Cost/Unit $ 3
Fixed Cost $ 200,000
Machinery Cost $ 520,000
Depreciation (CCA) 30%
Income Tax 40%
Salvage $ 100,000
Market Interest rate 12%

CCA 30%
year
0 $ - ### $ 520,000
1 $ 520,000 $ 78,000 $ 442,000
2 $ 442,000 $ 132,600 $ 309,400
3 $ 309,400 $ 92,820 $ 216,580
4 $ 216,580 $ 64,974 $ 151,606
5 $ 151,606 $ 45,482 $ 106,124

Year 0 1 2 3 4
Income Statement
Revenue $ 855,000 $ 855,000 $ 855,000 $ 855,000
Expenses
Fixed Cost $ 200,000 $ 200,000 $ 200,000 $ 200,000
Variable Cost $ 450,000 $ 450,000 $ 450,000 $ 450,000
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974

Taxable income $ 127,000 $ 72,400 $ 112,180 $ 140,026


Tax (40%) $ 50,800 $ 28,960 $ 44,872 $ 56,010

Net Income $ 76,200 $ 43,440 $ 67,308 $ 84,016

Cash Flow Statement


Operations
Net Income $ 76,200 $ 43,440 $ 67,308 $ 84,016
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974
Investment Activities
Machinery Cost $ (520,000)
Salvage
Disposal Tax
Working Capital $ (100,000)

Net Cash Flow $ (620,000) $ 154,200 $ 176,040 $ 160,128 $ 148,990

NPV $ 4,927.35
IRR 12%

Answer

New Selling Price 5.7


% Change in Cost -5.00%
uticals

$ 855,000

$ 200,000
$ 450,000
$ 45,482

$ 159,518
$ 63,807

$ 95,711

$ 95,711
$ 45,482

$ 100,000
$ 2,449.68

$ 243,642
Plato Pharmaceuticals
Initial cost $ 100,000
Selling Unit 150000
Selling Price/Unit $ 6
Tenure 5
Variable Cost/Unit $ 3
Fixed Cost $ 200,000
Machinery Cost $ 520,000
Depreciation (CCA) 30%
Income Tax 40%
Salvage $ (180,000)
Market Interest rate 12%

CCA 30%
year
0 $ - ### $ 520,000
1 $ 520,000 $ 78,000 $ 442,000
2 $ 442,000 $ 132,600 $ 309,400
3 $ 309,400 $ 92,820 $ 216,580
4 $ 216,580 $ 64,974 $ 151,606
5 $ 151,606 $ 45,482 $ 106,124

Year 0 1 2 3 4
Income Statement
Revenue $ 900,000 $ 900,000 $ 900,000 $ 900,000
Expenses
Fixed Cost $ 200,000 $ 200,000 $ 200,000 $ 200,000
Variable Cost $ 450,000 $ 450,000 $ 450,000 $ 450,000
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974

Taxable income $ 172,000 $ 117,400 $ 157,180 $ 185,026


Tax (40%) $ 68,800 $ 46,960 $ 62,872 $ 74,010

Net Income $ 103,200 $ 70,440 $ 94,308 $ 111,016

Cash Flow Statement


Operations
Net Income $ 103,200 $ 70,440 $ 94,308 $ 111,016
CCA $ 78,000 $ 132,600 $ 92,820 $ 64,974
Investment Activities
Machinery Cost $ (520,000)
Salvage
Disposal Tax
Initial Cost $ (100,000)

Net Cash Flow $ (620,000) $ 181,200 $ 203,040 $ 187,128 $ 175,990

NPV $ 6,928.60
IRR 12%

Answer

New Residual Value $ (180,000)


% Change in Cost -280%
euticals

$ 900,000

$ 200,000
$ 450,000
$ 45,482

$ 204,518
$ 81,807

$ 122,711

$ 122,711
$ 45,482

$ (180,000)
$ 114,449.68

$ 102,642
Sensitivity Summary

# Case % Change in Cost

a) Machinery Cost 25.00%


b) Fixed Cost 22.50%
c) Variable Cost 10.00%
d) Selling Price -5.00% Most Sensitive
e) Residual Value -280.00% Least Sensitive