ApV

0 1 2 3 4
sales 3250000 4686500 6757933 7308705
direct cost -1560000 -2358720 -3566385-4044280
specific fixed csot -1000000 -1050000 -1102500-1157625
txble CF 690000 1277780 2089048 2106799
TAX 25% -172500 -319445 -522262 -526700
cp allowanace 162500 162500 162500 162500
sales of prjct 16000000
workign cap -487500 -215475 -310715 -82615.73 1096306
captil expenditure -14000000
ncf -14487500 464525 810120.1 1646671 18838905
df 10% 1 0.909091 0.826446 0.751315 0.683013
pv -14487500 422295.5 669520.7 1237168 12867226
base case NPV 708709.84
$ 708 m

w ungeared cost of euity

To give ungeared cost of equity CAAPm is used again
capm=
Ke=Rf+(Rm-Rf)*Be Ke=Rf+(Rm-rf)8Be
14% 4.5%+(4%*Be) 10%
be 2.375

since there is noo debt the Ba would be

Be*Ve/Ve+Vd(1-t)

1.380813953488

w1 WORKINGS 0 1 2 3 4

SALES UNIT 1300 1820 2548 2675.4

SALES PRICE 2500 2575 2652.25 2731.818
sales $ 3250000 4686500 6757933 7308705

w2 DIRECT COST
 sales unit 1300 1820 2548 2675.4
direct cost $ per unit 1200 1296 1399.68 1511.654
total direct cost 1560000 2358720 3566385 4044280

specific fix cost 1000000 1050000 1102500 1157625

w3 CAPITL LALOWNACE

COSY 3000000 400000

ANNUL CAP. ALLO 650000

Tax benefit 162500 p.a

w4 working cap
sales $ 3250000 4686500 6757933 7308705

working cap req 487500 702975 1013690 1096306

incrementl 487500 215475 310715 82615.73 1096306
0 1 2 3 4

w5 discoutn fctor

ke=kei+(1-T)(kei-kd)Vd/Ve 14%=kei+0.72*(kei-4.5%)*(1)

vd 37952000
ve 37950000
kei
kd 4.50%
1-T 0.72
ke 14%
risk premium 4%

FINANCING IMPCT financing cf consist of dsicoutned at Kd o Rf

issues cost
tax releif TAX SHIELD
$ annual tax releif=total loan*int rte*tx rt
issue cost (1488*4/96) -603.66667 14488 annuity factor for n yrs
tx shield (workign) 766.64707
SUBSIDIY BENEFIT pv of tax shielf

TOTLA BENFIT ;7 subsidizied 159.368

 rmeiaani 54.33
DJSUETD PV totl 213.698
discounted@4.5%
3.587526
pv of tx shi 766.6471

subsidiy benefit

0
SALES-DISCOUNT 37.5
al loan*int rte*tx rt