2015 2016 2017 2018 2019 2020 2021

Revenue 200 210 225 230 240 240 250

Cost of sales 115 120 125 130 135 140 146
Gross Profit 85 90 100 100 105 100 104
Operating Expenditure 54 58 62 67 72 77 83
Operating Profit 31 32 38 33 33 22 21
Finance Cost 12 12 12 12 12 12 12
Profit before tax 19 20 26 21 21 10 9
Marginal Tax 5 5 6 5 5 3 2
Profit after tax 14 15 19 16 16 8 7
Terminal Value
FCF 14 15 19 16 16 8 7
PV of FCF 19 14 13 6 4
Firm Value 132.15

Market's valuation of syner 510000000 7846154 7350000000

7.85 113076923
113.076923
Firm Value 139.99 0.5 69.99619
Book value 65 0.2 13
EV 161.07692 0.3 48.32308
131.3193
4.377309
284.5251
2022
260 1.05 1.041667 1.043478 1.0714285714 1.2 coc 1.12
152 1.03 1.04
108
89 1.0740740741
19
0
19
5
14
119
134
76 163

Watson's Cost of Equity

Cost of Capital 12%

Investment Appraisal

2018 2019 2020 2021

Revenue 115.7407 138.8889 166.6667 200
Purchase Land 24
Construct a production facility and warehouse 20
Investment in machinery & technology 12
Computer systems and Networks 6
Purchase od delivery vehicles in 2019 9
Purchase of a warehouse in 2021 in for Rural Distribution 21
Packaging and set up 7
Operational Cost 110 121 133.1 146.41
Net cash Flow(Inflow- Outflow) -63.2593 8.888889 33.56667 32.59
NPV of net cash flow -56.4815 7.086168 23.89209 20.71153
NPV 40.00609

Payback Period 3.22

Initial Outflow 179 121 133.1 146.41

Inflow 115.7407 138.8889 166.6667 200
Net cash flow -63.2593 17.88889 33.56667 53.59
-11.8037 -0.22026
Discounted Net Cash flow -63.2593 12.30322 15.8774 17.43374
Discounted Payback period -35.0786 -2.01211 3.53

IRR 0.019103
 1.2
2022
240 1.12

254.6296

161.051
78.949 95.35512
44.79778 104.2117
861.2963 106.1065
740.561 108.0357
120.7353 90.7353
0.163032 523.7091
161.051 0.173255
240
78.949

17.664 1.454

Net present value $40 m

Accounting rate of return 16.30%
Internal rate of return 44.37%
Profitability index 17.32
Equivalent annuity $11.1 m
Pay back period 3.22 years
Discounted pay back period 3.53 years
 2015 2016 2017 2018 2019 2020 2021
Revenue 200 210 225 230 276 331 397
Cost of sales 115 120 141 166 195 229 269
Gross Profit 85 90 84 64 81 102 129
Operating Expenditure 54 58 66 61 69 78 88
Operating Profit 31 32 18 4 13 25 41
Finance Cost 12 12 12 12 12 12 12
Profit before tax 19 20 6 -8 1 13 29
Marginal Tax 5 5 2 -2 0 3 7
Profit after tax 14 15 5 -6 0 10 22
Terminal Value
FCF 14 15 5 -6 0 10 22
PV of FCF 5 -5 0 6 10
Firm Value 190.32

Market's valuation of syner 510000000 7846154 7350000000

7.85 113076923
113.076923
Firm Value 165.95 0.5 82.975
Book value 65 0.2 13
EV 161.07692 0.3 48.32308
144.2981
4.809936
312.6458
2022 Revenue
477 1.05 1.2 1.2 1.071429 1.2 coc 1.2
316 Cogs 1.175
161
99 expense 1.13
62
0
62
15
46 61
387
434
174 163
 2015 2016 2017 2018 2019 2020 2021 2022
Revenue 200 210 225 230 240 240 250 260
Cost of sales 115 120 125 130 135 140 146 152
Gross Profit 85 90 100 100 105 100 104 108
Operating Expenditure 54 58 62 67 72 77 83 89
Operating Profit 31 32 38 33 33 22 21 19
Finance Cost 12 12 12 12 12 12 12 0
Profit before tax 19 20 26 21 21 10 9 19
Marginal Tax 5 5 6 5 5 3 2 5
Profit after tax 14 15 19 16 16 8 7 14
Terminal Value 119
FCF 14 15 19 16 16 8 7 134
PV of FCF 19 13 11 5 3 54
Firm Value 105.33

2015 2016 2017 2018 2019 2020 2021 2022

Revenue 200 210 225 230 240 240 250 260
Cost of sales 115 120 125 130 135 140 146 152
Gross Profit 85 90 100 100 105 100 104 108
Operating Expenditure 54 58 62 67 72 77 83 89
Operating Profit 31 32 38 33 33 22 21 19
Finance Cost 12 12 12 12 12 12 12 0
Profit before tax 19 20 26 21 21 10 9 19
Marginal Tax 5 5 6 5 5 3 2 5
Profit after tax 14 15 19 16 16 8 7 14
Terminal Value 119
FCF 14 15 19 16 16 8 7 134
PV of FCF 19 14 13 6 4 76
Firm Value 132.15
discountin 20%
Initial Outflow 179 121 133.1 146.41 161.051
Inflow 115.7407 138.8889 166.6667 200 240
Net cash flow -63.2593 17.88889 33.56667 53.59 78.949
-11.8037 -0.22026
Discounted Net Cash flow -63.2593 15.97222 26.75914 38.1443 50.17352
Discounted Payback period -20.5279 -0.53816 3.53