ASSIGNMENT 1

Fairuza Fasya Rahadisty

Student ID (UiTM): 2021507873
Class: CPE520-EH2204J

Question 1

Assume
assume that loan 1 should be paid off first before paying for loan 2 and 3
interest rate 0,08
[a] Cash flow diagram (Uwais point of view)
Cashflow
Years
Loan 1 Loan 2 Loan 3 without interest Cash Flow Diagram (Uwais point of view)
FV FV FV rate year uwais
2000 1500
1 1000 (loan) 1000 loan 1 1000 1000 1200
2 1080 1200 (loan) 1200 loan 2 1200 1000
3 1166,4 1296 1500 (loan) 1500 loan 3 1500

Amount (RM)
0
4 1259,712 1399,68 1620 4 1 2 3 4 5 6 7
-1000
5 2000 1360,48896 639,51104 1511,6544 1749,6 2000 5 -2000
6 941,9148288 1889,568 6 -2000
-2000
7 1017,268015 2040,73344 1700 7 -3058 -3000
5 -3058,001
-4000
Year
ANSWER
[c] the amount of money that has to pay at year 7= RM 3058,001455 consider as X
[b]
if we look at the table, we assume that the payment of RM2000 at the end of 5th year was paid off the loan 1 in full for RM1360,489 in its 4th year of
loan (from year 1 to year 5). So, we still have RM 639,511 that could pays off (partly) the loan 2 in its third year of loan (from year 2 to year 5). year bank
1 -1000 Cash Flow Diagram (Bank point of View)
However, loan 2 still need to be paid off later. RM 941,9148 that written in the table (for loan 2) obtained from future value of (RM 1511,654 - RM
2 -1200 4000
639,511) with interest rate at 8% that calculated as first year of loan (from year 5 to year 6). Then we continue to calculate that loan for year 7 as 3058,001
3 -1500 3000
second year of loan (from year 5 to year 7), as the loan that should be paid off (RM 1017,268).
4 2000

Amount (RM)
2000
For loan 3, it's clear. The loan should be paid off in the 4th year of loan (from year 3 to year 7) with interest rate at 8%. So we obtained RM 2040,733 5 2000
that needed to paid off the loan 3. 6 1000
Therefore, Uwais has to pay RM 3058,001 (RM 1017,268 + RM 2040,733), to settle the loan at year 7 7 3058,001 0
1 2 3 4 5 6 7
-1000
-1000 -1200
[d] without interest rate, present and future value of money are the same. So if we compare between X and the amount should be owed without -2000 -1500
interest paid on the loan, Of course, X is much greater. We can see in the righthand column of the table. Without interest paid, RM 1700 would be year
owed.
Question 2

known Project Initial Investment (RM) after tax cash i=1(RM) after tax cash i=2-10(RM)
A 60 10 12
B 120 22 22
C 100 12 20
interest rate after tax 0,1
[c]
Project A Project B Project C Given that project A is the construction of methanol processing plant. Analyse the suitable location of
Years
Cashflow PV Cashflow PV Cashflow PV disc. Factor the plant using scoring method considering the important factors that you think is relevant
0 (initial cost) 60000000 120000000 100000000
1 10000000 9090909,091 22000000 20000000 12000000 10909090,91 0,909090909 Reference https://core.ac.uk/download/pdf/186718071.pdf
2 12000000 9917355,372 22000000 18181818,18 20000000 16528925,62 0,826446281 Seung Yeon, Lee. 2018. 'DEVELOPING A FRAMEWORK FOR METHANOL SUPPLY CHAIN OPTIMIZATION INCORPORATING
3 12000000 9015777,611 22000000 16528925,62 20000000 15026296,02 0,751314801 RENEWABLE PRODUCTION TECHNOLOGIES: A CASE STUDY OF TEXAS'. Master Thesis. Texas A&M University. Texas
4 12000000 8196161,464 22000000 15026296,02 20000000 13660269,11 0,683013455
5 12000000 7451055,877 22000000 13660269,11 20000000 12418426,46 0,620921323 Assume using scoring method unweighted (0-1) factor model For example,
6 12000000 6773687,161 22000000 12418426,46 20000000 11289478,6 0,56447393
7 12000000 6157897,419 22000000 11289478,6 20000000 10263162,36 0,513158118 Project A: Methanol Processing Plant Location candidate: North of Texas
8 12000000 5598088,563 22000000 10263162,36 20000000 9330147,604 0,46650738 Rater Chan Date 30/04/2021
9 12000000 5089171,42 22000000 9330147,604 20000000 8481952,367 0,424097618
10 12000000 4626519,473 22000000 8481952,367 20000000 7710865,789 0,385543289
Total PV 71916623,45 135180476,3 115618614,8 Criteria / Factor considered Qualifies Does not Qualify
NPV (Project) 11916623,45 15180476,33 15618614,84
Population density factor x

Land availability or Land Price Scaling Factor x

ANSWER Water Resource Factor x
[a] NPV for project A = RM 11916623,45 Feedstock Resource (CO2) Factor x
NPV for project B = RM 15180476,33 Demand Location Factor x
NPV for project C = RM 15618614,84 Wind energy potential (as Power plant) x
Water Transportation cost x
[b] Consider the value of NPV for each project, all projects have positive value of NPV. But the Feedstock transportation cost x
most expected NPV earned (the greatest value) will be in project C. So, it is recommended Product transportation cost x
to choose Project C because it is give us more profit.
Totals 8 2