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4 . Calculate the project s NPV , IRR, and payback period. 5 . Perform sensitivity analyses and calculate the project s NPV , IRR,

4. Calculate the projects NPV, IRR, and payback period.
5. Perform sensitivity analyses and calculate the projects NPV, IRR, and payback period if
a. sales volume increases 4.5%
b. unit price increases 20%
c. direct labor cost increases 5%
d. raw materials increase 5%
e. energy cost increases 5%
Sales Projected 600,000 per month
Unit Price 5 pesos per liter
timeframe 5 years
WACC 18.20%
Equipment Cost 50,000,000
Resale Value 4,000,000
Life of Machine 5 years
Raw Materials 1.8 per liter
Direct Labor Cost 180,000 per month
Energy Cost 50,000 per month
Rent Expense Costs 60,000 per month
administrative and selling expense 300,000 a year
overhead cost (accounting fee)1% of sales
Erosion after tax cash flows 800,000 per year
tax rate 30%
opportunity cost (lease)60,000 per year

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