Section 2 Group 4

(In millions) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Revenue 36 36 36 36 36
COGS
Raw materials -12.96 -12.96 -12.96 -12.96 -12.96
OH Cost -0.36 -0.36 -0.36 -0.36 -0.36
Direct Labor -2.16 -2.16 -2.16 -2.16 -2.16
Gross Profit 20.52 20.52 20.52 20.52 20.52
Operating Expenses
SG&A expense -0.3 -0.3 -0.3 -0.3 -0.3
Oppurtunity Cost -0.06 -0.06 -0.06 -0.06 -0.06
Energy cost -0.6 -0.6 -0.6 -0.6 -0.6
Depreciation -10 -10 -10 -10 -10
EBIT 9.56 9.56 9.56 9.56 9.56
Tax @30% 2.868 2.868 2.868 2.868 2.868
NOPAT 6.692 6.692 6.692 6.692 6.692
Depreciation 10 10 10 10 10
OCF 16.692 16.692 16.692 16.692 16.692
Receivables 4.438356 4.438356 4.438356 4.438356 4.438356
Payables -1.27825 -1.27825 -1.27825 -1.27825 -1.27825
Inventories 1.08 1.08 1.08 1.08 1.08
Working Capital 4.24011 4.24011 4.24011 4.24011 4.24011 0
Change in Working Capital -4.24011 0 0 0 0 4.24011
Capital Exp -50 2.8
Erosion -0.8 -0.8 -0.8 -0.8 -0.8
FCF -54.2401 15.892 15.892 15.892 15.892 22.93211
 NPV ₹ -1.72
IRR 17% Sales volume 0.6
Price 5
Direct Labour 2.16
Material 12.96
Energy Cost 0.6

Sensitivity Analysis
NPV NPV NPV
Sales Volume -1.72 Price -1.72 Direct Labour -1.72
0.52 4.20 1.40
0.54 4.40 1.60
0.56 4.60 1.80
0.58 4.80 2.00
0.60 5.00 2.16
0.62 5.20 2.30
0.64 5.40 2.50
0.66 5.60 2.70
0.68 5.80 2.90
 NPV NPV
Material -1.72 Energy Cost -1.72
12.20 0.52
12.40 0.54
12.60 0.56
12.80 0.58
12.96 0.60
13.20 0.62
13.40 0.64
13.60 0.66
13.80 0.68