wacc 14%

PERSISTANCE DATA
WACC 0.14
Project life 3 years
Years 0 1 2
Time line 2012 2013 2014
MARKET SEGMENT 350 402.5
Growth rate per year for sales 0.15
PERSISTANCE 0.15 0.18
SALE REVENUE 52.5 72.45
Equipment cost 8
Depriciation rate 0.1 0.32
SALVAGE VALUE
Workin capital
Inventory and Account recieveable 25 0 0
Accounts payable at point zero 10 0 0
Variable cost 0.38
General and administrative expense 0.12 0.1
Advertising and promotion 3 2
tax rate 0.4
technology cost 50

CALCULATIONS
1-(NWC)
Years 0 1 2
Time line 2012 2013 2014
Account recieveable and inventory 25 0 0
Accounts payable at point zero 10 0 0
Working capital 15 0 0
NWC -15 15 0

Depriciation
Equipment 8
Depriciation rates 20% 32%
depriciation expense 1.6 2.56
accumulated depriciation
book value
salvage value 2.32
 Years
Timeline
INITAIL OUTLAY

FCINV
3
2015 NWCINV
462.875
AFTER TAX OPERATING CASH FLOWS
0.2 SALES
92.575 VARIABLE COST
General AND ADMINISTRATIVE EXPENSE
0.19
as per book value ADVERTISING and PROMOTION EXPENSE
DEPRECIATION EXPENSE
25 OPERATING INCOME BEFORE TAX
10 TAX ON OPERATING INCOME 40%
OPERATING INCOME AFTER TAX
0.08 ADD BACK DEPRECATION
2 AFTER TAX OPERATING CASH FLOWS
TNOCF
AFTER TAX SALVAGE VALUE
EQUIPMENT
NWCINV
PROJECT AFTER CASH OPERATING CASH FLOWS
3
2015
25
10 cash flows
15
-15
cash flows

19%
1.52 PVs
5.68 NPV
2.32 IRR
MIRR
PI
 0 1 2 3
2012 2013 2014 2015

-58
-15

52.5 72.45 92.575

19.95 27.531 35.1785
6.3 7.245 7.406

3 2 2
1.6 2.56 1.52
21.65 33.114 46.4705
8.66 13.2456 18.5882
12.99 19.8684 27.8823
1.6 2.56 1.52
14.59 22.4284 29.4023

2.32
15 0 -15
-73 29.59 22.4284 16.7223

0 1 2 3 4
-73 29.59 22.4284 16.7223
-73 29.59

-73 29.59 22.4284 -56.2777 29.59

Project B
42.0149398545
-30.9850601455
-3%
0%
$0.58
 5 6

22.4284 16.7223

22.4284 16.7223