WACC Amount Weight

Equity 1,450,000,000 56.5%

P.Stock 117,600,000 4.6%
Debentures 250,000,000 9.7%
Loan 750,000,000 29.2%
Total 2,567,600,000 100.0%

Amount No. of shares

Ordinary Share capital 50,000,000
P.Stock 1,200,000
Debentures 250,000
Loan 750,000,000

Tax rate 30%

Constant growth rate method

Ke = D1 / Po + g
D1 1.236
Cost of equity Ke 7.3%

Cost of P.stock Kp 11.0%

Dividends Market value

year 0 -98
year 1 9
year 2 9
year 3 9
year 4 9
year 5 9
year 6 9
year 7 9

Cost of Debetures Kd 9.2%

Dividends Issue value

year 0 -1000
year 1 75
year 2 75
year 3 75
year 4 75
year 5 75

# Sensitivity: Internal
 Cost adjusted
for tax Wtd. Cost
7.3% 4.1%
11.0% 0.5%
6.4% 0.6%
4.6% 1.3%
6.6%

Interest Redempe
Par value Market value rate/Dividend tion value Term Growth rate
10 29 1.2 3%
100 98 9.0% 115 7
1000 1000 7.5% 1,100 5
6.5%

Redemption
value Total CF
-98
9
9
9
9
9
9
115 124
IRR 11.0%

Redemption
value Total CF
-1000
75
75
75
75
1,100 1175
IRR 9.2%

# Sensitivity: Internal
 # of shares 1,000,000
M/Price 35
Do 2
g 4.50%

A) Total Market value

35,000,000

B) No Growth
Ke = Do / Po 5.7%

C) Constant Growth
Ke = D1 / Po + g 10.5%
D1 2.09

D) Variable Growth
Ke = Discount rate at which NPV is zero
Ke 10.5%

Dividends Market value Intrinsic value Total CF

year 0 (35.0) (35.0)
year 1 2.30 2.30
year 2 2.40 2.40
year 3 2.35 2.35
year 4 2.40 2.40
year 5 2.45 42.9 45.39
year 6 2.56 NPV $0.00

PV factor
(Discount PV of
E) Dividends Intrinsic value factor) dividends
1 year 1 2.30 0.905281127 2.08
2 year 2 2.40 0.819533918 1.97
3 year 3 2.35 0.741908589 1.74
4 year 4 2.40 0.671635843 1.61
5 year 5 2.45 42.94 0.608019253 1.49
Total 8.89

# Sensitivity: Internal
 PV of
Intrinsic
value

26.11
26.11

# Sensitivity: Internal
 Cost
adjusted for
WACC Amount Weight tax
Equity 1,750,000 39.8% 19.5%
P.Stock 1,150,000 26.1% 6.0%
Loan 1,500,000 34.1% 5.6%
Total 4,400,000 100.0%

Amount No. of shares Par value

Ordinary Share capital 50,000 10
P.Stock 10,000 100
Loan 1,500,000

Tax rate 30%

Cost of equity 19.5%

Intrinsic
Dividends Market value value
year 0 -35
year 1 3
year 2 3.5
year 3 3.8
year 4 4.2
year 5 5 57.8
year 6 5.5 NPV

Cost of P.stock 6.0%

Redemption
Dividends Market value value
year 0 -115
year 1 9
year 2 9
year 3 9
year 4 9
year 5 9
year 6 9 100
IRR

# Sensitivity: Internal
 Wtd. Cost
7.8%
1.6%
1.9%
11.2%

Growth rate
Market Redempe beyond year
value Interest rate tion value Term 5
35 10%
115 9% 100 6
8%

Total CF
(35.0)
3
3.5
3.8
4.2
62.8 Int. value = D1/ (Ke - g)
0.0

Total CF
-115
9
9
9
9
9
109
6%

# Sensitivity: Internal
 Scenario Summary
Current Values: Ac1 Sc2
Changing Cells:
$E$10 15% 20% 25%
$E$12 8.0% 8.5% 9.0%
Result Cells:
$H$7 348,754 332,368 315,527
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.

# Sensitivity: Internal
 Cost 20,000,000
*Registration 0.30%
*Road taxes 50,000
*Adjustable withholding income tax 1.00%
*Down payment %age of cost 15%
Insurance as %age of cost for 5 years 1%
Interest rate 8%
Lease period years 5
Instalment payment Monthly

Total cost of vehicle Amount

Invoice price 20,000,000
Regis 60,000
Road taxes 50,000
Adjustable withholding income tax 0
Insurance 200,000
Financing cost 3,725,239
Total 24,035,239

Lease amount
Cost of vehicle 20,000,000
less: D/payemnt (3,000,000)
Amount leased 17,000,000
Insurance 200,000
Total lease by Bank 17,200,000

# Sensitivity: Internal
 Annual Instalement 4,307,851
Monthly instalment 348,754

# of Instalment Op. bal Prin Interest Instalment Closing bal

1 17,200,000 234,087 114,667 348,754 16,965,913
2 16,965,913 235,648 113,106 348,754 16,730,265
3 16,730,265 237,219 111,535 348,754 16,493,046
4 16,493,046 238,800 109,954 348,754 16,254,246
5 16,254,246 240,392 108,362 348,754 16,013,853
6 16,013,853 241,995 106,759 348,754 15,771,858
7 15,771,858 243,608 105,146 348,754 15,528,250
8 15,528,250 245,232 103,522 348,754 15,283,018
9 15,283,018 246,867 101,887 348,754 15,036,150
10 15,036,150 248,513 100,241 348,754 14,787,638
11 14,787,638 250,170 98,584 348,754 14,537,468
12 14,537,468 251,838 96,916 348,754 14,285,630
13 14,285,630 253,516 95,238 348,754 14,032,114
14 14,032,114 255,207 93,547 348,754 13,776,907
15 13,776,907 256,908 91,846 348,754 13,519,999
16 13,519,999 258,621 90,133 348,754 13,261,379
17 13,261,379 260,345 88,409 348,754 13,001,034
18 13,001,034 262,080 86,674 348,754 12,738,953
19 12,738,953 263,828 84,926 348,754 12,475,126
20 12,475,126 265,586 83,168 348,754 12,209,539
21 12,209,539 267,357 81,397 348,754 11,942,182
22 11,942,182 269,139 79,615 348,754 11,673,043
23 11,673,043 270,934 77,820 348,754 11,402,109
24 11,402,109 272,740 76,014 348,754 11,129,369
25 11,129,369 274,558 74,196 348,754 10,854,811
26 10,854,811 276,389 72,365 348,754 10,578,422
27 10,578,422 278,231 70,523 348,754 10,300,191
28 10,300,191 280,086 68,668 348,754 10,020,105
29 10,020,105 281,953 66,801 348,754 9,738,152
30 9,738,152 283,833 64,921 348,754 9,454,319
31 9,454,319 285,725 63,029 348,754 9,168,594
32 9,168,594 287,630 61,124 348,754 8,880,964
33 8,880,964 289,548 59,206 348,754 8,591,416
34 8,591,416 291,478 57,276 348,754 8,299,938
35 8,299,938 293,421 55,333 348,754 8,006,517
36 8,006,517 295,377 53,377 348,754 7,711,140
37 7,711,140 297,346 51,408 348,754 7,413,794
38 7,413,794 299,329 49,425 348,754 7,114,465

# Sensitivity: Internal
 39 7,114,465 301,324 47,430 348,754 6,813,141
40 6,813,141 303,333 45,421 348,754 6,509,808
41 6,509,808 305,355 43,399 348,754 6,204,453
42 6,204,453 307,391 41,363 348,754 5,897,062
43 5,897,062 309,440 39,314 348,754 5,587,621
44 5,587,621 311,503 37,251 348,754 5,276,118
45 5,276,118 313,580 35,174 348,754 4,962,538
46 4,962,538 315,670 33,084 348,754 4,646,868
47 4,646,868 317,775 30,979 348,754 4,329,093
48 4,329,093 319,893 28,861 348,754 4,009,200
49 4,009,200 322,026 26,728 348,754 3,687,174
50 3,687,174 324,173 24,581 348,754 3,363,001
51 3,363,001 326,334 22,420 348,754 3,036,667
52 3,036,667 328,510 20,244 348,754 2,708,157
53 2,708,157 330,700 18,054 348,754 2,377,458
54 2,377,458 332,904 15,850 348,754 2,044,553
55 2,044,553 335,124 13,630 348,754 1,709,430
56 1,709,430 337,358 11,396 348,754 1,372,072
57 1,372,072 339,607 9,147 348,754 1,032,465
58 1,032,465 341,871 6,883 348,754 690,594
59 690,594 344,150 4,604 348,754 346,444
60 346,444 346,444 2,310 348,754 0

# Sensitivity: Internal
 PV function Present value

Annual payment 10
No.of years 8 Yearly Discount factor
Discount rate 9% Payment
1 Year 1 10
2 Year 2 10
3 Year 3 10
4 Year 4 10
5 Year 5 10
6 Year 6 10
7 Year 7 10
8 Year 8 10

NPV function

Future value FV function

Investment rate 8%

Investment amount 10 Yearly compound factor Payment

No. of years 8 7 Year 1 10
6 Year 2 10
5 Year 3 10
4 Year 4 10
3 Year 5 10
2 Year 6 10
1 Year 7 10
0 Year 8 10

# Sensitivity: Internal
 $55.35

Discount factor PV -56

0.917431192661 9.17 10
0.841679993267 8.42 10
0.772183480061 7.72 10
0.708425211065 7.08 10
0.649931386298 6.50 10
0.596267326879 5.96 10
0.547034244843 5.47 10
0.501866279673 5.02 10
Total 55.35

$55.35 8.7%

$106.37

Compound
factor FV
1.71382426878 17.13824
1.586874322944 15.86874
1.4693280768 14.69328
1.36048896 13.60489
1.259712 12.59712
1.1664 11.664
1.08 10.8
1 10
Total 106.3663

# Sensitivity: Internal
 Tax rate 30%
Year 1 Year 2 Year 3 Year 4
PBT (4,000) 3,000 2,500 2,800
Tax rate 0% 30% 30% 30%
Tax - 900 750 840
Profit after tax (4,000) 2,100 1,750 1,960

Tax rate 30%

Tax rate 20%
Threshold 2,500
Year 1 Year 2 Year 3 Year 4
PBT 4,000 3,000 2,500 2,800
Tax rate 30% 30% 30% 30%
Tax 1,200 900 750 840
Profit after tax 2,800 2,100 1,750 1,960

Tax rate 30%

Tax rate 20%
Threshold 2,500
Year 1 Year 2 Year 3 Year 4
PBT (1,500) (500) 2,200 2,800
Tax rate 0% 0% 20% 30%
Tax - - 440 840
Profit after tax (1,500) (500) 1,760 1,960

# Sensitivity: Internal
 Year 5 Year 6
3,000 (1,500)
30% 0%
900 -
2,100 (1,500)

Year 5 Year 6
3,000 1,500
30% 20%
900 300
2,100 1,200

Year 5 Year 6
3,000 1,500
30% 20%
900 300
2,100 1,200

# Sensitivity: Internal
 Quantity ordered 1800

Slab 1 0-1000 1000 1 1000

Slab 2 1000-1500 500 0.9 450
Slab 3 >1500 300 0.8 240
1690

Total units
ordered 1600
Chargable
Balance units Units Slab units Price per unit Cost
1600 1000 1000 1.0 1,000
600 500 500 0.9 450
100 0 100 0.8 80
Total cost 1,530

# Sensitivity: Internal
 0.25 0.5 0.75 1
5% Year 1 Year 2 Year 3 Year 4

5000 3000 2000 6000

PV factor 0.9878765 0.9759001 0.9640688 0.9523809524
4,939 2,928 1,928 5,714

1 year 1 0.952381 5000 4761.9048

2 year 2 0.9070295 3000 2721.0884
3 year 3 0.8638376 2000 1727.6752
4 year 4 0.8227025 6000 4936.2148
5 year 5 0.7835262 -3000 -2350.578
6 year 6 0.7462154 2500 1865.5385

Par value 100

Dividend rate 4.50%
Div pmt Half yearly
M.P 95
Term years 5
Red. Price 110
Cost P Stock 12.2%
M.Price/ Discount
Dividends Red. Price CF factor
Year 0 -95 -95 1
Year 0.5 4.5 4.5 0.9439462498
Year 1 4.5 4.5 0.8910345225
Year 1.5 4.5 4.5 0.8410886959
Year 2 4.5 4.5 0.7939425203
Year 2.5 4.5 4.5 0.7494390646
Year 3 4.5 4.5 0.7074301944
Year 3.5 4.5 4.5 0.667776079
Year 4 4.5 4.5 0.6303447255
Year 4.5 4.5 4.5 0.5950115397
Year 5 4.5 110 114.5 0.5616589115
NPV

# Sensitivity: Internal
 1.25 1.5
Year 5 Year 6

-3000 2500
0.94083481 0.9294286
(2,823) 2,324

PVs
(95.00)
4.25
4.01
3.78
3.57
3.37
3.18
3.00
2.84
2.68
64.31
0.00

# Sensitivity: Internal
 Dep schedule 0 1
Ini cost 62,000
Dep rate 33.33%
Depreation 20,665
Acc De 20,665
NBV 41,335

0 1
1 Cost (60,000)
Installation (2,000)
Working capital (5,000)
Initaial CF (67,000)

Periodic
Savings 20,000
Add. Dep (20,665)
Net increase in profit (665)
Tax 38% 253
Net profit after tax (412)
Add Dep 20,665
2 Net operating CF 20,253

3 Working Capital
Net Cashflow (67,000) 20,253
NPV 12% (456)

# Sensitivity: Internal
 2 3 4 5

44.45% 14.81% 7.41%

27,559 9,182 4,594
48,224 57,406 62,000 62,000
13,776 4,594 - -

2 3 4 5

20,000 20,000 20,000 20,000

(27,559) (9,182) (4,594) -
(7,559) 10,818 15,406 20,000
2,872 (4,111) (5,854) (7,600)
(4,687) 6,707 9,552 12,400
27,559 9,182 4,594 -
22,872 15,889 14,146 12,400

5,000
22,872 15,889 14,146 17,400

# Sensitivity: Internal
 1) Cashflows
2) No irrelevant cost
3) Incremental costs and benefits
4) Seggregation of Cashflows (Initial, Periodic, Terminal)

Cost of old machines 300,000

Life years 11 1)
Age year 3
Salvage value 70,000
Book Value 86,400
Loss on disposal (16,400)
Tax rate 40%

Cost of new machine 480,000

Life years 8 2)
Salvage value 40,000
Annual savings 100,000

3)

# Sensitivity: Internal
s (Initial, Periodic, Terminal)

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Initial CF

Cost of new mach (480,000)

Proceeds from disposal old mach 70,000
Tax gain on loss on disposal 6,560
Net CF (403,440)

Operating CF
Savings 100,000 100,000 100,000 100,000 100,000
Old depreciation 34,560 34,560 17,280 - -
New Dep 96,000 153,600 92,160 55,296 55,296
Incremental dep (61,440) (119,040) (74,880) (55,296) (55,296)

Inc. Profit before tax 38,560 (19,040) 25,120 44,704 44,704

Tax gain/(loss) (15,424) 7,616 (10,048) (17,882) (17,882)
Profit after tax 23,136 (11,424) 15,072 26,822 26,822
Add back inc. Dep 61,440 119,040 74,880 55,296 55,296
Net operating CF 84,576 107,616 89,952 82,118 82,118

Terminal CF
Salvage value of new machine
Tax on Salvage value
Net Terminal CF

Cashflow for the Project (403,440) 84,576 107,616 89,952 82,118 82,118

Dep sch Old Year 1 Year 2 Year 3 Year 4 Year 5

MACR dep rates 5 year P.Class 20.0% 32.0% 19.2% 11.5% 11.5%
Depreciation 60,000 96,000 57,600 34,560 34,560
Acc Dep 60,000 156,000 213,600 248,160 282,720
Book Value 240,000 144,000 86,400 51,840 17,280

Dep new Year 1 Year 2 Year 3 Year 4 Year 5

MACR dep rates 5 year P.Class 20.0% 32.0% 19.2% 11.5% 11.5%
Depreciation 96,000 153,600 92,160 55,296 55,296
Acc Dep 96,000 249,600 341,760 397,056 452,352
Book Value 384,000 230,400 138,240 82,944 27,648

# Sensitivity: Internal
 Year 6 Year 7 Year 8

100,000 100,000 100,000

- - -
27,648 - -
(27,648) - -

72,352 100,000 100,000

(28,941) (40,000) (40,000)
43,411 60,000 60,000
27,648 - -
71,059 60,000 60,000

40,000
(16,000)
24,000

71,059 60,000 84,000

Year 6 Year 7 Year 8 Year 9 Year 10 Year 11

5.8%
17,280
300,000
-

Year 6 Year 7 Year 8

5.8%
27,648
480,000
-

# Sensitivity: Internal
 P&L
Revenue 15%
Costs 8%
Depreciation
Profits

Statement of Changes in equity

Open
Profit/(Loss)
Addition
W/D
Closing

Balance sheet
Assets
Cash
A/R 10%
Inventory 5%
Prepayments
Fixed assets
Total Assets

A/P 10%
Equity

Total Equity and Liab

Change in Cash

CF Statement
1) Take the difference yoy
2) Rearrange
3) Adjustments

CF for operating activities

i) Net Income
ii) Add back Depreciation

iii) A/R

# Sensitivity: Internal
 Inventory
Prepayments
A/P

CF for investing activities

Fixed assets

Cashflow from financing activities

Equity

Change in Cash
Opening cash
Closing Cash

# Sensitivity: Internal
 Year 0 Year 1 Year 2 Year 3 Year 4
12,000 15,000 17,000 19,550 22,483
10,000 10,000 11,000 11,880 12,830
4,000 4,000 4,000 4,500
2,000 1,000 2,000 3,670 5,152

52,000 53,000 55,000 58,670

2,000 1,000 2,000 3,670 5,152
50,000 - - -
- - 20,000
52,000 53,000 55,000 58,670 43,822

52,000 15,550 21,400 28,859 13,515

- 1,500 1,700 1,955 2,248
- 500 550 594 642
- 450 450 450 200
- 36,000 32,000 28,000 28,500
52,000 54,000 56,100 59,858 45,105

- 1,000 1,100 1,188 1,283

52,000 53,000 55,000 58,670 43,822

52,000 54,000 56,100 59,858 45,105

2,000 1,000 2,000 3,670 5,152

- 4,000 4,000 4,000 4,500

0 (1,500) (200) (255) (293)

# Sensitivity: Internal
 0 (500) (50) (44) (48)
- (450) - - 250
(0) 1,000 100 88 95

- (40,000) - - (5,000)

50,000 - - - (20,000)

52,000 (36,450) 5,850 7,459 (15,344)

- 52,000 15,550 21,400 28,859
52,000 15,550 21,400 28,859 13,515

# Sensitivity: Internal
 Supporting Schedules
Asset 1 Year1 Year2 Year3 Year4 Year5 Year6 Year7 Year8 Year9
Cost 40,000
Dep 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000
Acc. Dep 4,000 8,000 12,000 16,000 20,000 24,000 28,000 32,000 36,000
NBV 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 4,000

Asset 2
Cost 5000
Dep 500 500 500 500 500 500
Acc. Dep 500 1,000 1,500 2,000 2,500 3,000
NBV 4,500 4,000 3,500 3,000 2,500 2,000

Total
Cost 40,000 - - 5,000 - - - - -
Dep 4,000 4,000 4,000 4,500 4,500 4,500 4,500 4,500 4,500
Acc. Dep 4,000 8,000 12,000 16,500 21,000 25,500 30,000 34,500 39,000
NBV 36,000 32,000 28,000 28,500 24,000 19,500 15,000 10,500 6,000

# Sensitivity: Internal
 Year10 Year11 Year12 Year13 Year14

4,000
40,000
-

500 500 500 500

3,500 4,000 4,500 5,000
1,500 1,000 500 -

- - - -
4,500 500 500 500
43,500 4,000 4,500 5,000
1,500 1,000 500 -

# Sensitivity: Internal
 1 Return =Closing price/Opening price - 1
2 Risk Measured by Std Deviation of return
3 Portfolio Purpose is to reduce risk

Two important condittion for selection

1 Wtd return of portfolio should be higher than Risk free
2 Both stock should have positive returns with low correlation

Coefficient of Correlation =
〖𝐶𝑂𝑉〗 _(𝑎,𝑏)
Return of portfolio /(𝛿_(𝑎 ) 𝛿_𝑏 )
Wtd. Sum of Returns of individual investments
=√(𝑊_𝑎^2 𝛿_𝑎^2+𝑊_𝑏^2
Risk of portfolio
𝛿_𝑏^2+ 〖 2 𝑊_𝑎 𝑊_𝑏 𝐶𝑂𝑉 〗 _(𝑎,𝑏) )

VARa

A Ra Ra- Avg Ra (Ra- Avg Ra)^2

Jan 45
Feb 47 0.044444 0.014799676 0.0002190304078
Mar 46 -0.021277 -0.05092136 0.0025929853373
Apr 48 0.043478 0.013833492 0.0001913655109
May 50 0.041667 0.012021898 0.0001445260353
Jun 52 0.04 0.010355231 0.0001072308193
Jul 51 -0.019231 -0.04887554 0.0023888181892
Aug 55 0.078431 0.048786604 0.00238013273388
Average return 2.96%
Variance 0.0011462984334
Std. Dev 0.0338570293056

Variance Through built in function 0.0011462984334

Std. Dev 0.0338570293056

# Sensitivity: Internal
 Weights
A
0%
10%
20%
30%
40%
50%
60%
Weights Returns 70%
A 0% 3.0% 0.00% 80%
B 100% 1.2% 1.17% 90%
Weighted return 1.17% 100%

Portfolio Risk 3.49%

VARb COVa,b

(Ra- Avg Ra)*

B Rb Rb - Avg Rb (Rb - Avg Rb)^2 (Rb - Avg Rb)
25
24 -0.04 -0.0516666667 0.00266944444 -0.0007646499
25 0.041667 0.03 0.0009 -0.0015276409
26 0.04 0.0283333333 0.00080277778 0.000391949
26 0 -0.0116666667 0.00013611111 -0.0001402555
25 -0.038462 -0.0501282051 0.00251283695 -0.0005190892
26 0.04 0.0283333333 0.00080277778 -0.0013848069
27 0.038462 0.0267948718 0.00071796515 0.0013072308
1.17%
0.00122027332 -0.0003767518
0.03493241069

0.00122027332 -0.0003767518
0.03493241069

# Sensitivity: Internal
 Returns Rp Risk p
Chart Title
B A B 3.50%
100% 0.0296448 0.011667 1.17% 0.034932
3.00%
90% 0.0296448 0.011667 1.35% 0.03053
80% 0.0296448 0.011667 1.53% 0.0265762.50%
70% 0.0296448 0.011667 1.71% 0.023299
2.00%
60% 0.0296448 0.011667 1.89% 0.021021
50% 0.0296448 0.011667 2.07% 0.0200821.50%
40% 0.0296448 0.011667 2.25% 0.020666
1.00%
30% 0.0296448 0.011667 2.43% 0.022656
20% 0.0296448 0.011667 2.60% 0.0257270.50%
10% 0.0296448 0.011667 2.78% 0.029545
0.00%
0% 0.0296448 0.011667 2.96% 0.033857 0.018 0.02 0.022 0.024 0.026 0.028 0.03 0.032 0.034 0.036

# Sensitivity: Internal
0.03 0.032 0.034 0.036

# Sensitivity: Internal