EX 3: THE DELTA PROJECT

Year 0 1 2 3 4
Capital outlay ($1000) -1000 -500
Savage value ($1000)
Depcritiation of innitial investment -125 -125 -125 -125
Depcritiation of upgrade -100
Quantity (unit) 720000 740000 760000 780000 1280000
Price ($) 0.5 0.5 0.5 0.5 0.5
Sales ($1000) 360 370 380 390 640
Production cost ($1000) -72 -74 -76 -78 -128
Operating cost ($1000) -50 -50 -50 -50 -50
Changes in working capital ($1000) -2 -0.5 -0.6 -0.5 -0.4
Profits($1000) 238 121 129 137 237
Income tax -71.4 -36.3 -38.7 -41.1 -71.1
Net Inflow -835.4 209.2 214.7 -279.6 390.5

Working capital 2000 2500 3100 3600 4000

0.5 0.6 0.5 0.4
 5 6 7 8
dvi: $
16
-125 -125 -125 -125
-100 -100 -100 -100
1780000 2280000 2780000
0.75 0.75 0.75
1335 1710 2085
-178 -228 -278
-55 -55 -55
-0.3 -0.2 1.5 3
877 1202 1527 -225
-263.1 -360.6 -458.1 0
838.6 1066.2 1295.4 19

4300 4500 3000 0

0.3 0.2 -1.5 -3
 Ex 11

Year 1 Year 2 Year 3 Year 4

0 1 2 3
Sales volume ( units/year) 520000 624000 717000 788000
Selling price ($/unit) 30 30 30 30
Inflation adjusted price 30 31.2 32.448 33.74592
Variable cost ($/unit) 10 10.2 10.61 10.93
Inflation adjusted VC 10 10.506 11.256149 11.943506
Fixed costs ($) 700000 735000 779000 841000
Sale ($1000) 15600 19468.8 23265.216 26591.785
VC ($1000) -5200 -6555.744 -8070.659 -9411.4828
FC ($1000) -700 -735 -779 -841
Invesment cost ($1000) -25000
Depreciation -6250 -6250 -6250
-6250
Scrap value 1250
Profit 3450 5928.056 8165.5572 11339.302
Income Tax -1035 -1778.4168 -2449.667 -3401.7906
Net Inflow -16335 10399.6392 11965.89 14187.512
Nominal NPV $11,239.21