Answer?

So, by now, you would have estimated the Accounting Profit and Net Cash Flows for the project to manufacture Floxin. Well, Congratulations!. Now proceed to compute the Payback period for Floxin in this question. An additional information is provided to you regarding another independent project of Modern Pharma, by name K-CIN. The PAT, NC and output of appraisal techniques are provided for comparison with Floxin. But remember, K-CIN is an independent project not meant to compete with Floxin project. So, you may consider Floxin as an independent project and make investment decision. However, use X-CIN Information to just give additional insights K-CIN YeaT 1 2 3 5 Profit Ahar Tax Rs. In million 3 217 395 26.7 10 3 Tset Cash Flow Rs In millon -120 30.5 63.6 582 out you in the respective dels DONT round up or down Compute the Payback Period of Floxin and input below.conto com Floxin Payback K-CIN Years and 3 Years and 2 Compute the Payback period of Floxin and input below.K-CIN is provided for comparison only Floxin K-CIN Payback Period Years and months 3 Years and 2 months for reference, purpose, the detalk of Floxin is provided again from the base question Use this information for answering the questions 15-21 Sum total of all these 7 sub-questions carries 20 marks. . Modern Pharma is considering the manufacture of a new drug, Floxin, for which the following information has been gathered: Floxin is expected to have a produa le cycle of seven years and after that it would be withdrawn from the market. The sales from this drug are expected to be as follows: Floxin Year 1 2. Sales Rs lo million 3 4 5 80 6 120 7 160 200 160 120 The capital equipment required for manufacturing Floxin is 120 million and it will be depreciated at the rate of 25 percent per year as per the WDV method for wax purposes. The expected net salvage value after seven years is? 25 million Mon Dec 28 2020 722:57 AM For reference, purpose the details of Floxin is provided again from the base question Use this information for answering the questions 15-21. Sum total of all these 7 sub-questions carries 20 marks Modern Pharma is considering the manufacture of a new drug, Floxin, for which the following information has been gathered Floxin is expected to have a product life cycle of seven years and after that it would be withdrawn from the market. The sales from this drug are expected to be as follows: Floxin Year 1 2 3 4 5 Sales Rs. In million 6 7 80 120 160 200 160 120 80 The capital equipment required for manufacturing Floxinis ? 120 million and it will be depreciated at the rate of 25 percent per year as per the WDV method for tax purposes. The expected net sairage value after seven years is ? 25 million The working capital requirement for the project is expected to be 25 percent of sales Working capital level is adjusted at the beginning of the year in relation to the projected sales for the year. At the end of 7 years, working capital is expected to be liquidated at par, barring an estimated loss of 14 million on account of bad debt which, of course, will be a tax deductible expense The accountant of the firm has provided the following estimates for the cost of Floxin, Raw material con 30% of sales Variable manufacturing cost: 10% of sales Fixed annual operating and maintenance costs 10 million Variable selling expenses 10% of sales So, by now, you would have estimated the Accounting Profit and Net Cash Flows for the project to manufacture Floxin. Well, Congratulations!. Now proceed to compute the Payback period for Floxin in this question. An additional information is provided to you regarding another independent project of Modern Pharma, by name K-CIN. The PAT, NC and output of appraisal techniques are provided for comparison with Floxin. But remember, K-CIN is an independent project not meant to compete with Floxin project. So, you may consider Floxin as an independent project and make investment decision. However, use X-CIN Information to just give additional insights K-CIN YeaT 1 2 3 5 Profit Ahar Tax Rs. In million 3 217 395 26.7 10 3 Tset Cash Flow Rs In millon -120 30.5 63.6 582 out you in the respective dels DONT round up or down Compute the Payback Period of Floxin and input below.conto com Floxin Payback K-CIN Years and 3 Years and 2 Compute the Payback period of Floxin and input below.K-CIN is provided for comparison only Floxin K-CIN Payback Period Years and months 3 Years and 2 months for reference, purpose, the detalk of Floxin is provided again from the base question Use this information for answering the questions 15-21 Sum total of all these 7 sub-questions carries 20 marks. . Modern Pharma is considering the manufacture of a new drug, Floxin, for which the following information has been gathered: Floxin is expected to have a produa le cycle of seven years and after that it would be withdrawn from the market. The sales from this drug are expected to be as follows: Floxin Year 1 2. Sales Rs lo million 3 4 5 80 6 120 7 160 200 160 120 The capital equipment required for manufacturing Floxin is 120 million and it will be depreciated at the rate of 25 percent per year as per the WDV method for wax purposes. The expected net salvage value after seven years is? 25 million Mon Dec 28 2020 722:57 AM For reference, purpose the details of Floxin is provided again from the base question Use this information for answering the questions 15-21. Sum total of all these 7 sub-questions carries 20 marks Modern Pharma is considering the manufacture of a new drug, Floxin, for which the following information has been gathered Floxin is expected to have a product life cycle of seven years and after that it would be withdrawn from the market. The sales from this drug are expected to be as follows: Floxin Year 1 2 3 4 5 Sales Rs. In million 6 7 80 120 160 200 160 120 80 The capital equipment required for manufacturing Floxinis ? 120 million and it will be depreciated at the rate of 25 percent per year as per the WDV method for tax purposes. The expected net sairage value after seven years is ? 25 million The working capital requirement for the project is expected to be 25 percent of sales Working capital level is adjusted at the beginning of the year in relation to the projected sales for the year. At the end of 7 years, working capital is expected to be liquidated at par, barring an estimated loss of 14 million on account of bad debt which, of course, will be a tax deductible expense The accountant of the firm has provided the following estimates for the cost of Floxin, Raw material con 30% of sales Variable manufacturing cost: 10% of sales Fixed annual operating and maintenance costs 10 million Variable selling expenses 10% of sales