Assuming the forecasts were done at the start of Year 0 Tax Rate

Growth Factor of Inflation

Four Year System

If project is sold after 4 years. Assuming a S.L Depreciation.
Depriciation rate (SL in years) 7 Tires/car
New cars this yr
New car tires this year
Exp Growth factor in car production
OEM tire demand year 1
Initial Cashflows GW share in OEM Market
Initial Investment 140000000 GW OEM mkt yr 1
NWC 9000000
Total 149000000 Replace Mkt this yr
Exp Growth factor in replac. mkt
Terminal Cash-flows Replacement mkt demand year 1
Salvage value 54000000 GW share in replacement market
GW rplcmt mkt yr 1
WC recovered at end of project 29720623.77
Total TCF 83720623.77 Depriciation
Discounted TCF 46397941.35 Depreciated value
Salvage value
NPV 9108213.4082 Capital loss
NPV with the value of tax savings 10438292.596 Tax savings
Operating Cashflows PV of tax savings

Particular Year 1 Year 2 Year 3

Sales
OEM 2525600 2588740 2653458.5
Price 38 39.615 41.2986375
OEM Sales 95972800 102552935.1 109584220.712794
Replacement 1142400 1165248 1188552.96
Price 59 61.5075 64.12156875
Replace Sales 67401600 71671491.36 76211880.337656

Total Units 3668000 3753988 3842011.46

Total Sales 163374400 174224426.46 185796101.05045
Variable Cost
per unit 22 22.935 23.9097375
total 80696000 86097714.78 91861485.4805917

Sales and General Exp 26000000 26845000 27717462.5

Depreciation 20000000 20000000 20000000

EBIT 36678400 41281711.68 46217153.069858

Tax @ 40% 14671360 16512684.672 18486861.2279432

EAT 22007040 24769027.008 27730291.8419148

Cashflow 42007040 44769027.008 47730291.8419148

WC 24506160 26133663.969 27869415.1575674

Changes in WC 15506160 1627503.969 1735751.18856745

Free Cash-flow 26500880 43141523.039 45994540.6533473

Discounted CF 22865297.67 32116528.886 29543094.1172605

SL Assignment
Payback
Discounted Payback
IRR
NPV 10438292.596
PI

Change In NPV 0
10438292.596

Unit Change in input variable

Sales and general expenses

Sensitivity Analysis
10438292.5956942
0.1 46621343.4149184
% Change in NPV 0.2 34560326.475177
0.3 22499309.5354356
Column input cell 0.4 10438292.5956942
Tax Rate 0.5 -1622724.34404718
0.6 -13683741.2837886
Negative Relationship 0.7 -25744758.22353

10438292.5956942
1.0422 10337995.1292221
% Change in NPV 1.0423 10371423.4446951
1.0424 10404855.9334202
Column input cell 1.0425 10438292.5956942
Growth Factor of Inflation 1.0426 10471733.4318143
1.0427 10505178.4420773
Positive Relationship 1.0428 10538627.6267804

10438292.5956942
1.022 9944404.29208394
% Change in NPV 1.023 10108720.2257117
1.024 10273349.5082993
Column input cell 1.025 10438292.5956942
Exp Growth factor in car production 1.026 10603549.9441006
1.027 10769122.0100788
Positive Relationship 1.028 10935009.250546

10438292.5956942
0.99 5336210.92174829
% Change in NPV 1 7004518.60393774
1.01 8705054.15740931
Column input cell 1.02 10438292.5956942
Exp Growth factor in replac. mkt 1.03 12204712.6792632
1.04 14004796.9155266
Positive Relationship 1.05 15839031.558834

Sensitivity Matrix
Exp Growth fact(Row input cell)
10438292.596 0.08 0.09
0.05 -36300419.1 -29967684.0017049
0.06 -27053583.64 -20720848.5363288
0.07 -17806748.17 -11474013.0709527
Column input cell 0.08 -8559912.706 -2227177.60557667
GW share in replacement market 0.09 686922.75916 7019657.85979942
0.1 9933758.2245 16266493.3251755
Positive Relationship 0.11 19180593.69 25513328.7905515

Scenario
Definition NPV Probability
Poor
Normal
Good
 0.4
1.0425

4
5600000
22400000
1.025
22960000
0.11
2525600

14000000
1.02
14280000
0.08
1142400

80000000
60000000
54000000
6000000 assuming that there exists opportunity to set off this loss
2400000
1330079.1875

Year 4

2719794.9625
43.053829594
117097588.85
1212324.0192
66.846735422
81039902.957

3932118.9817
198137491.8

24.925901344
98011609.81

28618280.031
20000000

51507601.961
20603040.785

30904561.177
50904561.177

29720623.77
1851208.6128

49053352.564
27185351.384

Percent change in NPV

346.6%
231.1%
115.5%
0.0%
-115.5%
-231.1%
-346.6%

Percent change in NPV

-1.0%
-0.6%
-0.3%
0.0%
0.3%
0.6%
1.0%

Percent change in NPV

-4.7%
-3.2%
-1.6%
 0.0%
1.6%
3.2%
4.8%

Percent change in NPV

-48.9%
-32.9%
-16.6%
0.0%
16.9%
34.2%
51.7%

GW share in OEM Market Positive Relationship

0.1 0.11 0.12 0.13 0.14
-23634948.9 -17302213.8 -10969478.7 -4636743.5992 1695991.50147
-14388113.44 -8055378.34 -1722643.23 4610091.86621 10942826.9668
-5141277.97 1191457.13 7524192.231 13856927.3316 20189662.4322
4105557.4951 10438292.6 16771027.7 23103762.797 29436497.8976
13352392.96 19685128.06 26017863.16 32350598.2623 38683333.363
22599228.426 28931963.53 35264698.63 41597433.7277 47930168.8284
31846063.891 38178799 44511534.09 50844269.1931 57177004.2937

EXPECTED VALUE
Assuming the forecasts were done at the start of Year 0

Four Year System

If project is sold after 4 years. Assuming a S.L Depreciation.
Depriciation rate (SL in years) 7

Initial Cashflows
Initial Investment 140000000
NWC 9000000
Total 149000000

Terminal Cash-flows
Salvage value 54000000

WC recovered at end of project 51029872.0210125

Total TCF 105029872.021013
Discounted TCF 58207519.5163877

NPV 122711379.084666
NPV with the value of tax savings 124041458.272151
Operating Cashflows

Particular Year 1 Year 2

Sales
OEM 3528000 3704400
Price 38 41.8
OEM Sales 134064000 154843920
Replacement 1470000 1543500
Price 59 64.9
Replace Sales 86730000 100173150

Total Units 4998000 5247900

Total Sales 220794000 255017070
Variable Cost
per unit 22 22.935
total 109956000 120360586.5

Sales and General Exp 26000000 28340000

Depreciation 20000000 20000000

EBIT 64838000 86316483.5

Tax @ 40% 19451400 25894945.05

EAT 45386600 60421538.45

Cashflow 65386600 80421538.45

WC 33119100 38252560.5
Changes in WC 24119100 5133460.5

Free Cash-flow 41267500 75288077.95

Discounted CF 35606125.9706644 56047899.099

SL Assignment
Payback
Discounted Payback
IRR
NPV 124041458.272151
PI

Change In NPV 10.8833091844271

10438292.5956942

Unit Change in input variable

Sales and general expenses

Sensitivity Analysis

0.1
% Change in NPV 0.2
0.3
Column input cell 0.4
Tax Rate 0.5
0.6
Negative Relationship 0.7

1.0422
% Change in NPV 1.0423
1.0424
Column input cell 1.0425
Growth Factor of Inflation 1.0426
1.0427
Positive Relationship 1.0428
 1.022
% Change in NPV 1.023
1.024
Column input cell 1.025
Exp Growth factor in car production 1.026
1.027
Positive Relationship 1.028

0.99
% Change in NPV 1
1.01
Column input cell 1.02
Exp Growth factor in replac. mkt 1.03
1.04
Positive Relationship 1.05

Sensitivity Matrix
Exp Growth fact
124041458.272151 0.08
0.05 -36300419.1
0.06 -27053583.64
0.07 -17806748.17
Column input cell 0.08 -8559912.706
GW share in replacement market 0.09 686922.75916
0.1 9933758.2245
Positive Relationship 0.11 19180593.69

Scenario
Definition NPV
Poor Inflation Up, rest down -78733736.17
Normal As given 10438292.596
Good Inflation Down, rest up 124041458.27
Tax Rate 0.3
Growth Factor of Inflation 1.1

Tires/car 4
New cars this yr 5600000
New car tires this year 22400000
Exp Growth factor in car production 1.05
OEM tire demand year 1 23520000
GW share in OEM Market 0.15
GW OEM mkt yr 1 3528000

Replace Mkt this yr 14000000

Exp Growth factor in replac. mkt 1.05
Replacement mkt demand year 1 14700000
GW share in replacement market 0.1
GW rplcmt mkt yr 1 1470000

Depriciation 80000000
Depreciated value 60000000
Salvage value 54000000
Capital loss 6000000 assuming that there exists opportunity to set off this loss
Tax savings 2400000
PV of tax savings 1330079.1875

Year 3 Year 4

3889620 4084101
45.98 50.578
178844727.6 206565660.38
1620675 1701708.75
71.39 78.529
115699988.25 133633486.43

5510295 5785809.75
294544715.85 340199146.81

23.9097375 24.925901344
131749706.997563 144216523

30890600 33670754
20000000 20000000

111904408.852438 142311869.78
33571322.6557313 42693560.935

78333086.1967063 99618308.849
98333086.1967063 119618308.85

44181707.3775 51029872.021
5929146.87750001 6848164.6435

92403939.3192063 112770144.21
59352658.757649 62497175.741

124041458.272151 Percent change in NPV

46621343.4149184 346.6%
34560326.475177 231.1%
22499309.5354356 115.5%
10438292.5956942 0.0%
-1622724.34404718 -115.5%
-13683741.2837886 -231.1%
-25744758.22353 -346.6%

124041458.272151 Percent change in NPV

10337995.129222 -1.0%
10371423.4446952 -0.6%
10404855.9334202 -0.3%
10438292.5956942 0.0%
10471733.4318142 0.3%
10505178.4420773 0.6%
10538627.6267804 1.0%
 124041458.272151 Percent change in NPV
9944404.29208394 -4.7%
10108720.2257117 -3.2%
10273349.5082993 -1.6%
10438292.5956942 0.0%
10603549.9441006 1.6%
10769122.0100788 3.2%
10935009.250546 4.8%

124041458.272151 Percent change in NPV

5336210.92174829 -48.9%
7004518.60393774 -32.9%
8705054.1574093 -16.6%
10438292.5956942 0.0%
12204712.6792632 16.9%
14004796.9155265 34.2%
15839031.558834 51.7%

(Row input cell) GW share in OEM Market Positive Relationship

0.09 0.1 0.11
-29967684.0017049 -23634948.9 -17302213.8
-20720848.5363288 -14388113.44 -8055378.34
-11474013.0709527 -5141277.97 1191457.13
-2227177.60557667 4105557.4951 10438292.6
7019657.8597994 13352392.96 19685128.06
16266493.3251754 22599228.426 28931963.53
25513328.7905515 31846063.891 38178799
0.12 0.13 0.14
-10969478.7 -4636743.5992 1695991.50147
-1722643.23 4610091.86621 10942826.9668
7524192.231 13856927.3316 20189662.4322
16771027.7 23103762.797 29436497.8976
26017863.16 32350598.2623 38683333.363
35264698.63 41597433.7277 47930168.8284
44511534.09 50844269.1931 57177004.2937

Probability EXPECTED VALUE

0.2 -15746747.23
0.6 6262975.5574
0.2 24808291.654
Exp Val or Project 15324519.978
Assuming the forecasts were done at the start of Year 0

Four Year System

If project is sold after 4 years. Assuming a S.L Depreciation.
Depriciation rate (SL in years) 7

Initial Cashflows
Initial Investment 140000000
NWC 9000000
Total 149000000

Terminal Cash-flows
Salvage value 54000000

WC recovered at end of project 19774211.9497537

Total TCF 73774211.9497537
Discounted TCF 40885643.2864386

NPV -37158990.3800239
NPV with the value of tax savings -35828911.1925392
Operating Cashflows

Particular Year 1 Year 2

Sales
OEM 2195200 2151296
Price 38 38.76
OEM Sales 83417600 83384232.96
Replacement 823200 806736
Price 59 60.18
Replace Sales 48568800 48549372.48

Total Units 3018400 2958032

Total Sales 131986400 131933605.44
Variable Cost
per unit 22 22.935
total 66404800 67842463.92

Sales and General Exp 26000000 26260000

Depreciation 20000000 20000000

EBIT 19581600 17831141.52

Tax @ 40% 9790800 8915570.76

EAT 9790800 8915570.76

Cashflow 29790800 28915570.76

WC 19797960 19790040.816
Changes in WC 10797960 -7919.184

Free Cash-flow 18992840 28923489.944

Discounted CF 16387264.8835203 21531972.792

SL Assignment
Payback
Discounted Payback
IRR
NPV -35828911.1925392
PI

Change In NPV -4.43244940339367

10438292.5956942

Unit Change in input variable

Sales and general expenses

Sensitivity Analysis

0.1
% Change in NPV 0.2
0.3
Column input cell 0.4
Tax Rate 0.5
0.6
Negative Relationship 0.7

1.0422
% Change in NPV 1.0423
1.0424
Column input cell 1.0425
Growth Factor of Inflation 1.0426
1.0427
Positive Relationship 1.0428
 1.022
% Change in NPV 1.023
1.024
Column input cell 1.025
Exp Growth factor in car production 1.026
1.027
Positive Relationship 1.028

0.99
% Change in NPV 1
1.01
Column input cell 1.02
Exp Growth factor in replac. mkt 1.03
1.04
Positive Relationship 1.05

Sensitivity Matrix
Exp Growth fact
-35828911.1925392 0.08
0.05 -36300419.1
0.06 -27053583.64
0.07 -17806748.17
Column input cell 0.08 -8559912.706
GW share in replacement market 0.09 686922.75916
0.1 9933758.2245
Positive Relationship 0.11 19180593.69

Scenario
Definition NPV
Poor Inflation Up, rest down -78733736.17
Normal As given 10438292.596
Good Inflation Down, rest up 124041458.27
Tax Rate 0.5
Growth Factor of Inflation 1.02

Tires/car 4
New cars this yr 5600000
New car tires this year 22400000
Exp Growth factor in car production 0.98
OEM tire demand year 1 21952000
GW share in OEM Market 0.1
GW OEM mkt yr 1 2195200

Replace Mkt this yr 14000000

Exp Growth factor in replac. mkt 0.98
Replacement mkt demand year 1 13720000
GW share in replacement market 0.06
GW rplcmt mkt yr 1 823200

Depriciation 80000000
Depreciated value 60000000
Salvage value 54000000
Capital loss 6000000 assuming that there exists opportunity to set off this loss
Tax savings 2400000
PV of tax savings 1330079.1875

Year 3 Year 4

2108270.08 2066104.6784
39.5352 40.325904
83350879.266816 83317538.915
790601.28 774789.2544
61.3836 62.611272
48529952.731008 48510540.75

2898871.36 2840893.9328
131880831.997824 131828079.67

23.9097375 24.925901344
69311253.263868 70811841.897

26522600 26787826
20000000 20000000

16046978.733956 14228411.768
8023489.36697799 7114205.884

8023489.36697799 7114205.884
28023489.366978 27114205.884

19782124.7996736 19774211.95
-7916.01632640138 -7912.84992

28031405.3833044 27122118.734
18005059.6378285 15031069.02

-35828911.1925392 Percent change in NPV

46621343.4149184 346.6%
34560326.475177 231.1%
22499309.5354356 115.5%
10438292.5956942 0.0%
-1622724.34404718 -115.5%
-13683741.2837886 -231.1%
-25744758.22353 -346.6%

-35828911.1925392 Percent change in NPV

10337995.129222 -1.0%
10371423.4446952 -0.6%
10404855.9334202 -0.3%
10438292.5956942 0.0%
10471733.4318142 0.3%
10505178.4420773 0.6%
10538627.6267804 1.0%
 -35828911.1925392 Percent change in NPV
9944404.29208394 -4.7%
10108720.2257117 -3.2%
10273349.5082993 -1.6%
10438292.5956942 0.0%
10603549.9441006 1.6%
10769122.0100788 3.2%
10935009.250546 4.8%

-35828911.1925392 Percent change in NPV

5336210.92174829 -48.9%
7004518.60393774 -32.9%
8705054.1574093 -16.6%
10438292.5956942 0.0%
12204712.6792632 16.9%
14004796.9155265 34.2%
15839031.558834 51.7%

(Row input cell) GW share in OEM Market Positive Relationship

0.09 0.1 0.11
-29967684.0017049 -23634948.9 -17302213.8
-20720848.5363288 -14388113.44 -8055378.34
-11474013.0709527 -5141277.97 1191457.13
-2227177.60557667 4105557.4951 10438292.6
7019657.8597994 13352392.96 19685128.06
16266493.3251754 22599228.426 28931963.53
25513328.7905515 31846063.891 38178799
0.12 0.13 0.14
-10969478.7 -4636743.5992 1695991.50147
-1722643.23 4610091.86621 10942826.9668
7524192.231 13856927.3316 20189662.4322
16771027.7 23103762.797 29436497.8976
26017863.16 32350598.2623 38683333.363
35264698.63 41597433.7277 47930168.8284
44511534.09 50844269.1931 57177004.2937

Probability EXPECTED VALUE

0.2 -15746747.23
0.6 6262975.5574
0.2 24808291.654
Exp Val or Project 15324519.978