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Can someone help with NPV calculations? Table 3: Child's toy manufacturing China China China UK UK m Wm #m fm m 2019 2020 2021 2019

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Can someone help with NPV calculations?

Table 3: Child's toy manufacturing China China China UK UK \m Wm #m fm m 2019 2020 2021 2019 2020 Product sold (units) 8,500,000 7,950,000 6,250,000 6.700,000 5,500,000 Turnover 2.178 2,404 2,113 239 200 Cost of sales 1,013 1,161 1,088 112 95 Admin expenses 370 481 454 41 39 Selling & distribution expenses 320 433 423 33 35 Operating profit 475 329 148 53 31 Interest 0 0 0 02 6 7 Income tax expense 0 0 0 13 oo Profit after tax 475 329 148 34 16 The establishment of a production facility on the outskirts of Hanoi would cost US$480m. An initial 10% is payable immediately with the remaining 90% payable at the end of year 1. The Vietnamese government incentivises foreign direct investment, with incentives including capital grant funding of up to 50% of the initial capital investment, payable in equal instalments over 5 years, starting in year 1. No writing down allowance is available on any element of the capital expenditure as a result of the capital grant provision. The grant funding is repayable if the company leaves Vietnam within 5 years. In addition, a working capital investment of US$96m would be required at the outset of the investment. A subsidiary company (Jasmine Vietnam) would be the corporate vehicle through which the company would operate in Vietnam. US$30,000 has already been incurred to date exploring the legal structure of a company in Vietnam A loan facility of US$480m would be established with Bank Vietnam to finance the construction of the production facility, with the interest rate cost expected to be 12%. In addition, an overdraft facility of US$100m would be established with an interest rate cost of 15%. Use the overall Group cost of capital benchmark for investments of this nature of 10% to appraise this capital proposal. The following plant projections have been provided and are expressed in current terms. Year 1 Year 2 Year 3 Year 4 Year 5 Sm Sm Sm Sm Sm Reduced labour costs 40 38 36 34 32 Savings on distribution costs 20 20 20 20 20 Table 3: Child's toy manufacturing China China China UK UK \m Wm #m fm m 2019 2020 2021 2019 2020 Product sold (units) 8,500,000 7,950,000 6,250,000 6.700,000 5,500,000 Turnover 2.178 2,404 2,113 239 200 Cost of sales 1,013 1,161 1,088 112 95 Admin expenses 370 481 454 41 39 Selling & distribution expenses 320 433 423 33 35 Operating profit 475 329 148 53 31 Interest 0 0 0 02 6 7 Income tax expense 0 0 0 13 oo Profit after tax 475 329 148 34 16 The establishment of a production facility on the outskirts of Hanoi would cost US$480m. An initial 10% is payable immediately with the remaining 90% payable at the end of year 1. The Vietnamese government incentivises foreign direct investment, with incentives including capital grant funding of up to 50% of the initial capital investment, payable in equal instalments over 5 years, starting in year 1. No writing down allowance is available on any element of the capital expenditure as a result of the capital grant provision. The grant funding is repayable if the company leaves Vietnam within 5 years. In addition, a working capital investment of US$96m would be required at the outset of the investment. A subsidiary company (Jasmine Vietnam) would be the corporate vehicle through which the company would operate in Vietnam. US$30,000 has already been incurred to date exploring the legal structure of a company in Vietnam A loan facility of US$480m would be established with Bank Vietnam to finance the construction of the production facility, with the interest rate cost expected to be 12%. In addition, an overdraft facility of US$100m would be established with an interest rate cost of 15%. Use the overall Group cost of capital benchmark for investments of this nature of 10% to appraise this capital proposal. The following plant projections have been provided and are expressed in current terms. Year 1 Year 2 Year 3 Year 4 Year 5 Sm Sm Sm Sm Sm Reduced labour costs 40 38 36 34 32 Savings on distribution costs 20 20 20 20 20

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