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Calculate the project's NPV, IRR, and payback period. 2. Perform sensitivity analyses and calculate the project's NPV, IRR, and payback period if sales volume increases
Calculate the project's NPV, IRR, and payback period.
2. Perform sensitivity analyses and calculate the project's NPV, IRR, and payback period if
sales volume increases 4.5%
unit price increases 20%
direct labor cost increases 5%
raw materials increase 5%
energy cost increases 5%
Inputs Monthly sales (units) 600,000 Increase (decrease) of the sales volume 0% Unit sales price (pesos) 5 Increase (decrease) sales price 0% Unit raw material cost (pesos) 1.8 Increase (decrease) raw material cost 0% Monthly labor cost (pesos) 180,000 Increase (decrease) labor cost 0% Monthly energy cost (pesos) 50,000 Increase (decrease) energy cost 0% SG&A cost 300,000 Overhead to sales 1% Annual Building rental (pesos) 60,000 Erosion cost 800,000 Marketing study 5,000,000 Cost of new equipment 50,000,000 Resale value of equipment 4,000,000 Straight line depreciation years 5 Average collection period (days) Average payment period (days) 45 36 Tax rate 30% Cost of capital 18.2% CAGR between 2007-2011 6.30% Average CAGR between 2007-2011 1.575%
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