Question
Motoral A.. It was established in 1969 and is a company that produces engines and gearboxes for the automotive industry under license. Due to the
Motoral A.. It was established in 1969 and is a company that produces engines and gearboxes for the automotive industry under license. Due to the development of the automotive industry and the increasing demand for specific engines and transmissions, especially from the defense industry, the company has put some new investments on its agenda to meet these needs. These investments and related data are as follows:
Investment Projects (000,00 TL) | 1.Project Engine and Transmission Casting Line Revision
| 2.Project Engine and Transmission Assembly Line revision | 3. Alloys R&D Laboratory Setup | 4. From Alloy R&D Laboratory Procurement of services |
Years | ||||
0 | - 500.000 | - 240.000 | - 120.000 | - 60.000 |
1 | 45.000 | 30.000 | 10.000 | 0 |
2 | 60.000 | 40.000 | 10.000 | 0 |
3 | 70.000 | 46.500 | 10.000 | 0 |
4 | 80.000 | 60.000 | 10.000 | 0 |
5 | 100.000 | 70.000 | 10.000 | 0 |
6 | 100.000 | 70.000 | 15.000 | 0 |
7 | 100.000 | 75.000 | 15.000 | 0 |
8 | 100.000 | 75.000 | 15.000 | 0 |
9 | 100.000 | 75.000 | 15.000 | 0 |
10 | 100.000 | 75.000 | 15.000 | 0 |
* Motoral A.. does not have sufficient equity to be transferred to these investments, but will only be able to meet the first two projects. Equity cost is 18%.
* Foreign sources will be required for the third and fourth projects. The interest rate to be applied for foreign resources will be 20% and will be repaid in equal installments over a 5-year term.
* In all project proposals, all of the investment amount is subject to depreciation and economic life is 6 years, weighted depreciation rate is 15%.
* In accordance with the incentive provisions in practice, the corporate tax rate to which the company will be subject will be 20%.
* The third project, the Alloy R&D Laboratory Installation Project, and the fourth project, the Alloy R&D Service Procurement Project, are unusual projects.
WANTED:
1.) Calculate the principal and debt repayments for the foreign resources to be used by the company and show them in the table
2.) Calculate the depreciation expenses related to the project proposals and show them in the table.
3.) In light of the data listed above, Motoral A.. Make the necessary analyzes to be made by the project office. Carry out the analysis by following the order of evaluation methods described in the course.
4.) Describe the evaluation results of the project proposals on Motoral A..'s agenda, by explaining which of the project valuation methods can be used for what purpose, which valuation method should be preferred where and where the ranking is followed in the project evaluation.
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