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  • Ahmad Ali MF20019 Saji Manikanta MF20017 Suraj MF20008 Ruchi MF20006

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    Dpmi Darbhanga
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    This document contains an assignment submission with names and student IDs, a 6 year projected financial statement for a company showing declining sales, costs, and profits, and a calculation of the net present value of future cash flows from the project which is negative, indicating the project should not be undertaken. It also notes $10 million has already been spent on research which is considered a sunk cost.

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    G__A_2325_CO_FACDMF20-3_S_MF20008 (1)

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    This document contains an assignment submission with names and student IDs, a 6 year projected financial statement for a company showing declining sales, costs, and profits, and a calculation of the net present value of future cash flows from the project which is negative, indicating the project should not be undertaken. It also notes $10 million has already been spent on research which is considered a sunk cost.

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    © All Rights Reserved
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    20 views4 pages

    Ahmad Ali MF20019 Saji Manikanta MF20017 Suraj MF20008 Ruchi MF20006

    Uploaded by

    Dpmi Darbhanga
    This document contains an assignment submission with names and student IDs, a 6 year projected financial statement for a company showing declining sales, costs, and profits, and a calculation of the net present value of future cash flows from the project which is negative, indicating the project should not be undertaken. It also notes $10 million has already been spent on research which is considered a sunk cost.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 4

    Assignment Submitted By

    Name MF ID
    Ahmad Ali MF20019
    Saji Manikanta MF20017
    Suraj MF20008
    Ruchi MF20006
    Year $ in Millions
    Year 1 2 3 4 5 6
    Sales 600.00 480.00 384.00 307.00 246.00 197.00
    Cash costs 300.00 291.00 282.00 274.00 266.00 258.00
    Depreciation 50.00 50.00 50.00 50.00 50.00 50.00
    EBIT 250.00 139.00 52.00 -17.00 -70.00 -111.00
    tax at 34% 85.00 47.26 17.68 -5.78 -23.80 -37.74
    EBIAT 165.00 91.74 34.32 -11.22 -46.20 -73.26
    Add back depreciation 50.00 50.00 50.00 50.00 50.00 50.00
    NWC 60.00 48.00 38.00 31.00 25.00 20.00
    D-NWC -60.00 -12.00 -10.00 -7.00 -6.00 -5.00
    FCFF 155.00 153.74 94.32 45.78 9.80 -18.26

    Amount of money spent for research in the past 3 years $10 million Sunk cost
    Amount presently required $400 million

    Present value of FCFF 324.83


    Initial Investment 400.00
    Difference -75.17

    Should not undertake the project


    7 8 9
    157.00 126.00 0.00
    250.00 242.00 0.00
    50.00 50.00 0.00
    -143.00 -166.00 0.00
    -48.62 -56.44 0.00
    -94.38 -109.56 0.00
    50.00 50.00 0.00
    16.00 13.00 0.00
    -4.00 -3.00 0.00
    -40.38 -43.56 0.00

    Sunk cost

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