CASH FLOWS

unit sales
sales price per unit
variable costs per unit
non variable costs

sales revenue
CASH FLOW FORECAST NOWC*15%
basis for dep
annual depreciation rate
annual depreciation expense
remaining un depreciated value

sales revenue
variable cost
non variable costs
depreciation
EBIT
tax on operating profit (40%)
net operating profit after taxes

add back depreciatiion

equipment purchases
profit from salvage value
cash flow due to tax on sal val
cash flow due to change in WC
opportunity cost
after text externalities

project net cash flow

COMPUTATION OF NPV

WACC= R= 10% 0.01

Year Cash flows

0 -10000
1 1900
2 2700
3 2345
4 7800

COMPUTATION OF IRR

14%

COMPUTATION OF MIRR
WACC = r = 10%

Year Cash flows

1 1900
2 2700
3 2345
4 7800

Project cost = discounted at MIRR

10,000 = 16175.40/ (1+MIRR)^4

(1+MIRR)^4=16175.40/10000
1+MIRR= (1.61754)^(1/4)
1+MIRR= 1.12775
MIRR=0.12775
 COMPUTATION OF PI
WACC = r = 10% =

Year Cash flows

1 1900
2 2700
3 2345
4 7800

PI = PV of positive Cfs / project cost

PI = 11048.02/10000
PI= 1.10

COMPUTATION OF PAYBACK

Year cash flows

0 -10000
1 1900
2 2700
3 2345
4 7800

Payback period= 3+(3055/7800)=3+0.39=3.39 years

OR 3 years, 4 months, 20 days

COMPUTATION OF DISCOUNTTED PAYBACK

Year Cash flows

0 -10000
 1 1900
2 2700
3 2345
4 7800

Discounted payback periodd= 3+(4279.49/5327.50) = 3+ 0.80 = 3.80 years

OR 3 years, 9 months, 18 days

 10,000 11500 13225 15209
1.5 1.56 1.62 1.69
1.07 1.10 1.14 1.17
2120 2184 2249 2317

15000 17940 21456 25662

2250 2691 3218 3849 0
7750
33.33% 44.45% 14.81% 7.41%
2583 3445 1148 574
5167 1722 574 0

Cash flows at the end of the year

15000 17940 21456 25662

10700 12674 15013 17782
2120 2183.6 2249 2317
2583 3445 1148 574
-403 -363 3047 4988
-161 -145 1219 1995
-242 -218 1828 2993

2583 3445 1148 574

-7750
639
-256
-2250 -441 -527 -631 3849
0 0 0 0 0
0 0 0 0

-10000 1900 2700 2345 7800

 PVIF@10% PV of CFs
1.0000 -10000
0.9901 1881.19
0.9803 2646.80
0.9706 2276.03
0.9610 7495.65
NPV 4299.67

0.1

FVIF@10% FV of CFs
1.33100 2528.90
1.21000 3267.00
1.10000 2579.50
1.00000 7800.00
16175.40

ct cost = discounted at MIRR value of Futures positive CFs

0 = 16175.40/ (1+MIRR)^4
RR)^4=16175.40/10000
RR= (1.61754)^(1/4)
RR= 1.12775
or =12.77%
 0.1

PVIF@10% FV of CFs
0.9091 1727.27272727273
0.8264 2231.40495867769
0.7513 1761.8332081142
0.6830 5327.50495184755
11048.0158459122

cumulative CFs
-10000
-8100
-5400
-3055
4745

4.68
20.4

PVIF@10% DCF Cummulative DCFs

1.0000 -10000.00 -10000.00
 1.0000 1900.00 -8100.00
1.0000 2700.00 -5400.00
1.0000 2345.00 -3055.00
1.0000 7800.00 4745.00

0.80 = 3.80 years 9.6

18