A B C D E F G H I

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 Expected Value Distribution
14 Base year sales for 2011 ($000) 1,000.00 Non-Stochastic
15 Expected sales Growth Rate 0.10 Non-Stochastic
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 0.10 Non-Stochastic
20
21 FCF Calculations ($000) 2010 2011 2012 2013 2014 2015
22 Revenues 1,000.00 1,100.00 1,210.00 1,331.00 1,464.10
23 Less: Cost of goods sold -674.00 -741.40 -815.54 -897.09 -986.80
24 Equals: Gross profit 326.00 358.60 394.46 433.91 477.30
25 Less: Operating expenses before depreciation -215.00 -225.00 -236.00 -248.10 -261.41
26 Equals: EBITDA 111.00 133.60 158.46 185.81 215.89
27 Less: Depreciation and amortization -33.00 -33.00 -33.00 -33.00 -33.00
28 Equals: EBIT 78.00 100.60 125.46 152.81 182.89
29 Less: Tax -23.40 -30.18 -37.64 -45.84 -54.87
30 Equals: NOPAT (Net op. profits after taxes) 54.60 70.42 87.82 106.96 128.02
31 Plus: Depreciation 33.00 33.00 33.00 33.00 33.00
32 Less: Capital expenditures -330.00
33 Help Row: level of working capital -250.00 -275.00 -302.50 -332.75 -366.03
34 Less: Investment in net working capital -250.00 0.00 -25.00 -27.50 -30.25 -33.28
35 plus: Liquidation of Net Working Capital 366.03
36 plus: Liquidation of PP&E 165.00
37 Equals: Project Free Cash Flow (PFCF) -580.00 87.60 78.42 93.32 109.71 658.77
38
39 Valuation Output
40 NPV 43.07 <-- =NPV(B11,C37:G37)+B37
41 Internal Rate of Return (IRR) 0.1536 <-- =IRR(B37:G37)
42 Equation in cell B45: <-- =B40
43 Scenario Analysis: base year sales (1-dimensional) Equation in cell C45: <-- =B41
44 Base year sales NPV IRR
45 43.07 0.15
46 100 -461.43 -0.28 <-- {=TABLE(,B14)}
47 200 -405.38 -0.19
48 300 -349.32 -0.12
49 400 -293.27 -0.06
50 500 -237.21 -0.02 800.00 0.40
51 600 -181.15 0.03 0.30
600.00
52 700 -125.10 0.06
53 800 -69.04 0.10 400.00
0.20
54 900 -12.99 0.13
0.10
55 1,000 43.07 0.15 200.00

In %
56 1,100 99.12 0.18 0.00
57 1,200 155.18 0.20 0.00
58 1,300 211.23 0.23 0 500 1,000 1,500 2,000 2,500-0.10
59 1,400 267.29 0.25 -200.00
-0.20
60 1,500 323.34 0.27
61 1,600 379.40 0.29 -400.00 -0.30
62 1,700 435.45 0.30
-600.00 -0.40
63 1,800 491.51 0.32
64 1,900 547.57 0.34 NPV IRR
65 2,000 603.62 0.35
66