A B C D E F G H

1 Earthilizer Project --- Valuation Model Setup

2
3 Certain inputs to valuation Value
4 Initial investment in plant and equipment ($000) 330.00
5 Initial new working capital requirements ($000) 250.00
6 Fixed Operating Costs ($000) 115.00
7 Depreciation Method Straight Line
8 Depreciable life of plant and equipment (Years) 10.00
9 Tax Rate 0.30
10 Net Working Capital / Sales 0.25
11 Project WACC 0.1325
12
13 Uncertain (potentially) inputs to valuation Value Used Distribution Min Max Random Simulated
14 Base year sales for 2011 ($000) 1,477.98 Uniform 300.00 1,500.00 0.98 1,477.98 <-- =D14+F14*(E14-D14)
15 Expected sales Growth Rate 0.10 Non-Stochastic <-- =RAND()
16 Gross Profit / Sales 0.33 Non-Stochastic
17 Variable Operating Expenses (before depr.) / Sales 0.10 Non-Stochastic
18 Terminal value multiple of PPE book value 1.00 Non-Stochastic
19 Terminal value multiple of NWC book values 1.00 Non-Stochastic
20
21 FCF Calculations ($000) 2010 2011 2012 2013 2014 2015
22 Revenues 1,477.98 1,625.78 1,788.36 1,967.19 2,163.91 <-- =F22*(1+$B$15)
23 Less: Cost of goods sold -996.16 -1,095.77 -1,205.35 -1,325.89 -1,458.48 <-- =-G22*(1-$B$16)
24 Equals: Gross profit 481.82 530.00 583.00 641.30 705.44 <-- =G22+G23
25 Less: Operating expenses before depreciation -262.80 -277.58 -293.84 -311.72 -331.39 <-- =-($B$6+$B$17*G22)
26 Equals: EBITDA 219.02 252.43 289.17 329.59 374.04 <-- =G24+G25
27 Less: Depreciation and amortization -33.00 -33.00 -33.00 -33.00 -33.00 <-- =-($B$4/$B$8)
28 Equals: EBIT 186.02 219.43 256.17 296.59 341.04 <-- =G26+G27
29 Less: Tax -55.81 -65.83 -76.85 -88.98 -102.31 <-- =-G28*$B$9
30 Equals: NOPAT (Net op. profits after taxes) 130.22 153.60 179.32 207.61 238.73 <-- =G28+G29
31 Plus: Depreciation 33.00 33.00 33.00 33.00 33.00 <-- =-G27
32 Less: Capital expenditures -330.00
33 Help Row: level of working capital -369.50 -406.44 -447.09 -491.80 -540.98 <-- =G22*$B$10*(-1)
34 Less: Investment in net working capital -250.00 -119.50 -36.95 -40.64 -44.71 -49.18 <-- =G33-F33
35 plus: Liquidation of Net Working Capital 540.98 <-- =(-1)*G33
36 plus: Liquidation of PP&E 165.00 <-- =(-1)*B32-C31-D31-E31-F31-G31
37 Equals: Project Free Cash Flow (PFCF) -580.00 43.72 149.65 171.67 195.90 928.53 <-- =G30+G31+G34+G35+G36
38
39 Valuation Output
40 NPV 311.00 <-- =NPV(B11,C37:G37)+B37
41 Internal Rate of Return (IRR) 0.2627 <-- =IRR(B37:G37)
42

1 of 2 MC_1RV
 A B C D E F G H
43 Monte Carlo Simulation + Analysis of Output
44 Run Base Year Sales NPV IRR Some summary statistics of the simulated RVs
45 1,477.98 311.00 0.26 Mean BYS 897.33 <-- =AVERAGE(B46:B5045)
46 1 848.23 -42.01 0.11
47 2 976.47 29.88 0.15 Some summary statistics of the simulation output
48 3 1,404.34 269.72 0.25 Mean NPV -11.43 <-- =AVERAGE(C46:C10045)
49 4 419.79 -282.17 -0.05 SD NPV 194.16 <-- =STDEV.P(C46:C10045)
50 5 310.43 -343.47 -0.11 Confidence Interv. 3.81 <-- =CONFIDENCE.NORM(0.05,G49,10000)
51 6 457.15 -261.23 -0.04 5%-Percentile -315.43 <-- =PERCENTILE.EXC(C46:C10045,0.05)
52 7 1,122.43 111.69 0.18 Prob. of NPV>0 0.485 <-- =1-PERCENTRANK.EXC(C46:C10045,0)
53 8 348.02 -322.40 -0.09 Min NPV -349.30 <-- =MIN(C46:C10045)
54 9 462.65 -258.15 -0.03 Max NPV 323.25 <-- =MAX(C46:C10045)
55 10 699.59 -125.33 0.06
56 11 1,283.63 202.05 0.22
57 12 667.07 -143.56 0.05 Manual graphing of histogram
58 13 1,358.45 244.00 0.24
59 14 1,398.07 266.21 0.25 Bins Frequency
60 15 1,362.61 246.33 0.24 -349 0 <-- =COUNTIF($C$46:$C$10045,"<"&F60)
61 16 1,204.24 157.55 0.20 -323 377 <-- =COUNTIF($C$46:$C$10045,"<"&F61)-SUM($G$60:G60)
62 17 519.93 -226.04 -0.01 -297 369
63 18 1,359.15 244.39 0.24 -272 364
64 19 1,353.95 241.48 0.24 -246 417
65 20 1,418.26 277.52 0.25 -220 371
66 21 455.24 -262.30 -0.04 -194 405
67 22 988.05 36.37 0.15 -168 391
68 23 351.43 -320.49 -0.09 -142 385
69 24 760.89 -90.97 0.08 -116 370
70 25 1,232.05 173.14 0.21 -90 370 The below equations help with finding bins…
71 26 811.79 -62.44 0.10 -64 378 <-- =G53
72 27 559.44 -203.89 0.01 -38 398 <-- =($F$86-$F$60)/26+F71
73 28 991.40 38.25 0.15 -13 396 <-- =G54+1
74 29 457.80 -260.87 -0.03 13 375
75 30 382.09 -303.31 -0.07 39 351
76 31 1,425.39 281.52 0.25 65 387
77 32 644.87 -156.00 0.04 91 377
78 33 1,469.94 306.49 0.26 117 390
79 34 1,033.74 61.98 0.16 143 407
80 35 406.81 -289.45 -0.06 169 413
81 36 429.87 -276.52 -0.05 195 408
82 37 848.77 -41.71 0.11 221 357
83 38 412.50 -286.26 -0.06 247 399
84 39 482.00 -247.30 -0.02 272 363
85 40 862.97 -33.74 0.12 298 423
86 41 521.60 -225.10 -0.01 324 359
87 42 1,008.15 47.64 0.16 More 0 <-- =10000-SUM(G60:G86)
88 43 709.13 -119.98 0.07
89 44 796.55 -70.98 0.09
90 45 930.74 4.24 0.13
91 46 1,245.23 180.53 0.21
Histogram
92 47 407.02 -289.33 -0.06 450
93 48 720.05 -113.86 0.07 400
94 49 799.77 -69.17 0.10
350
95 50 491.06 -242.22 -0.02
96 51 1,027.87 58.69 0.16 300
97 52 1,031.26 60.59 0.16 250
98 53 1,148.24 126.16 0.19 200
99 54 451.22 -264.56 -0.04 150
100 55 1,291.38 206.40 0.22 100
101 56 468.39 -254.93 -0.03
50
102 57 554.44 -206.69 0.01
103 58 499.28 -237.62 -0.02 0
-349
-323
-297
-272
-246
-220
-194
-168
-142
-116
-90
-64
-38
-13

117
143
169
195
221
247
272
298
324
More
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39
65
91
104 59 1,072.53 83.72 0.17
105 60 610.29 -175.38 0.03
106 61 512.83 -230.02 -0.01
107 62 1,299.38 210.89 0.23
108 63 602.92 -179.52 0.03

2 of 2 MC_1RV