NPV Probability NPV Pr.

Vari
200 0.3 60 34680
600 0.5 300 1800
900 0.2 180 25920
Average NPV 540
Variance 62400
St. Dev. 249.7999
Lower Higher
1 sigma 68% 290.20008 789.7999
2 sigma 95% 40.4001601 1039.6
3 sigma 99.70%
Discount rate Project life Tax rate Depreciation
12% 10 33.33%

Expected values (Rs. In thousand)

Investment in year 0 20,000
variable costs as a percentage of sales 66.67%
For years 1 to 10
Sales 18000
Variable Costs
Contribution
Fixed Costs 1000
EBT
Tax
EAT
Depreciation Benefit
Cash flow from operations
PV of cash flow stream
NPV of the project

Key variables Pessimistic Expected Optimistic

Investment 24000 20000 18000
NPV
Sales 15000 18000 21000
NPV
variable costs as a percentage of sales 70% 66.67% 65%
NPV
Fixed Costs 1300 1000 800
NPV
Discount rate Project life Tax rate Depreciation
12% 10 33.33%

Expected values (Rs. In thousand)

Investment in year 0 20,000
variable costs as a percentage of sales 66.67%
For years 1 to 10
Sales 18000
Variable Costs
Contribution 18000
Fixed Costs 1000
EBT
Tax
EAT
Depreciation Benefit
Cash flow from operations 0
PV of cash flow stream
NPV of the project

Key variables Pessimistic Expected Optimistic

Investment -24000 -20000 -18000
Sales 15000 18000 21000
variable costs as a percentage of sales 70% 66.67% 65%
Fixed Costs 1300 1000 800
I 10000
Year 1 Year 2
Net Cash Flow Probability Cash flow y 1 Variance Variance*p Net Cash Flow Probability
3000 0.3 900 4000000 1200000 2000 0.2
5000 0.4 2000 0 0 4000 0.6
7000 0.3 2100 4000000 1200000 6000 0.2
r 6% 5000 Variance 2400000
(1+r)^t 1.06 St. Dev. 1549.1933385 (1+r)^t
Ct/(1+r)^t 4716.9811321 Ct/(1+r)^t
st. Dev.^2/(1+r)^2t 2135991.456
st. dev./(1+r)^t 1461.5031495

Disc. Cash Inflows 12475.063307 Cash Outflow 10000

2475.0633073

Variance SD
5095246.6143 2257.2652955

Disc.SD
3888.0020936
 Year 3
Cash flow y 2 Variance Variance*p Net Cash Flow Probability Cash flow y 3
400 4000000 800000 3000 0.3 900
2400 0 0 5000 0.4 2000
1200 4000000 800000 7000 0.3 2100
4000 Variance 1600000 5000
1.1236 St. Dev. 1264.9110641 (1+r)^t 1.191016
3559.9857601 Ct/(1+r)^t 4198.0964152
st. Dev.^2/(1+r)^2t 1267349.8612
st. dev./(1+r)^t 1125.766344
Variance Variance*p
4000000 1200000
0 0
4000000 1200000
Variance 2400000
St. Dev. 1549.193

st. Dev.^2/(1+r)^2t 1691905

st. dev./(1+r)^t 1300.733