Analysis A: Project sensitivity to an increase in interest rate (in Financing)

Vestas was able to lock the 7% amortized loan rate, but the interest-only loan that will be needed to finance the blades cannot be locked. The company is concerned that between now and December 31^st, rates may increase significantly higher than the current 8%.

Starting from the provided APV model, proceed as follows:

• In Financing, build a onedimensional Data Table that recalculates APV for various blade loan rates (10 rates above 8%)
• Add a conditional formatting to highlight scenarios where the project becomes unprofitable, if any.
• Provide a brief comment below the Data Table

**PLEASE INCLUDE WHAT THE ROW & COLUMN INPUTS USED**

A11Y Back to Index Value drivers: Operations Fixed cost [annual) Fixed cost annual increase Energy generated (MW/H per year) Sale price (per KW/H) Cost of operation (% of sales) ONWC requirement (% of sales) Income tax rate WACC Cost of equity Model: Unlevered Operating FCFS Table 2-Time line Contractual Sales Variable costs Fixed costs Depreciation EBIT C taxes Net operating Income e Depreciation Capital Expenditure ONWC Change in ONWC FCF NPV of Operating NPV of Financing APV C 30.000.000 1.00% 15,000,000 0.16 10.00% 5.00% 21.00% 10.00% 11.00% 5/27/22 ( C C (358.919.822) 900,478,428 541,558,606 541,558,606 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 12/31/23 2,400,000,000 240,000,000 30,000,000 1,233,750,000 896,250,000 188,212,500 708,037,500 1,233,750,000 (10,500,000,000 120,000,000 120,000,000 120,000,000 (10,620,000,000 1,941,787,500 3.0% 3.5% 12/31/22 12/31/24 2,400,000,000 240,000,000 30,300,000 1,233,750,000 895,950,000 188,149,500 707,800,500 1,233,750,000 120,000,000 1,941,550,500 4.0% 12/31/25 2,400,000,000 240,000,000 30,603,000 1,233,750,000 895,647,000 188,085,870 707,561,130 1,233,750,000 120,000,000 1,941,311,130 4.5% 12/31/26 2,400,000,000 240,000,000 30,909,030 1,233,750,000 895,340,970 C 188,021,604 707,319,366 1,233,750,000 120,000,000 1,941,069,366 5.0% 12/31/27 2,400,000,000 240,000,000 31,218,120 1,233,750,000 895,031,830 C 187,956,695 707,075,185 1,233,750,000 (3,815,000,000) 120,000,000 (1,874,174,815) 5.5% 12/31/28 2,400,000,000 240,000,000 31,530,302 1.233.750.000 894,719,698 187,891,137 706,828,562 1,233,750,000 120,000,000 1,940,578,562 6.0% 12/31/29 2,400,000,000 240,000,000 31,845,605 1,233,750,000 894,404,395 187, 824,923 706,579,472 1,233,750,000 120,000,000 1,940,329,472 C 6.5% 12/31/30 2,400,000,000 240,000,000 32,164,061 1,233,750,000 894,085,939 187,758,047 706,327,892 1,233,750,000 120,000,000 1,940,077,892 0 7.0% 12/31/31 2,400,000,000 240,000,000 32,485,701 1,233,750,000 893,764,299 C 187,690,503 706,073,796 1,233,750,000 12/31/32 2,400,000,000 240,000,000 32,810,558 1,233,750,000 893,439,442 187,622,283 705,817,159 1,233,750,000 2,935,375,000 120,000,000 (120,000,000) 1,939,823,796 4,994,942,159 7.5% A11Y Back to Index Value drivers: Operations Fixed cost [annual) Fixed cost annual increase Energy generated (MW/H per year) Sale price (per KW/H) Cost of operation (% of sales) ONWC requirement (% of sales) Income tax rate WACC Cost of equity Model: Unlevered Operating FCFS Table 2-Time line Contractual Sales Variable costs Fixed costs Depreciation EBIT C taxes Net operating Income e Depreciation Capital Expenditure ONWC Change in ONWC FCF NPV of Operating NPV of Financing APV C 30.000.000 1.00% 15,000,000 0.16 10.00% 5.00% 21.00% 10.00% 11.00% 5/27/22 ( C C (358.919.822) 900,478,428 541,558,606 541,558,606 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 12/31/23 2,400,000,000 240,000,000 30,000,000 1,233,750,000 896,250,000 188,212,500 708,037,500 1,233,750,000 (10,500,000,000 120,000,000 120,000,000 120,000,000 (10,620,000,000 1,941,787,500 3.0% 3.5% 12/31/22 12/31/24 2,400,000,000 240,000,000 30,300,000 1,233,750,000 895,950,000 188,149,500 707,800,500 1,233,750,000 120,000,000 1,941,550,500 4.0% 12/31/25 2,400,000,000 240,000,000 30,603,000 1,233,750,000 895,647,000 188,085,870 707,561,130 1,233,750,000 120,000,000 1,941,311,130 4.5% 12/31/26 2,400,000,000 240,000,000 30,909,030 1,233,750,000 895,340,970 C 188,021,604 707,319,366 1,233,750,000 120,000,000 1,941,069,366 5.0% 12/31/27 2,400,000,000 240,000,000 31,218,120 1,233,750,000 895,031,830 C 187,956,695 707,075,185 1,233,750,000 (3,815,000,000) 120,000,000 (1,874,174,815) 5.5% 12/31/28 2,400,000,000 240,000,000 31,530,302 1.233.750.000 894,719,698 187,891,137 706,828,562 1,233,750,000 120,000,000 1,940,578,562 6.0% 12/31/29 2,400,000,000 240,000,000 31,845,605 1,233,750,000 894,404,395 187, 824,923 706,579,472 1,233,750,000 120,000,000 1,940,329,472 C 6.5% 12/31/30 2,400,000,000 240,000,000 32,164,061 1,233,750,000 894,085,939 187,758,047 706,327,892 1,233,750,000 120,000,000 1,940,077,892 0 7.0% 12/31/31 2,400,000,000 240,000,000 32,485,701 1,233,750,000 893,764,299 C 187,690,503 706,073,796 1,233,750,000 12/31/32 2,400,000,000 240,000,000 32,810,558 1,233,750,000 893,439,442 187,622,283 705,817,159 1,233,750,000 2,935,375,000 120,000,000 (120,000,000) 1,939,823,796 4,994,942,159 7.5%