PBP: Payback period CCP:Cumilative cash position CCR:Cumilative cash ratio ROROI: Rate of return on investment NPV:Cumilative discounted cash position at the end of project DPBP: Discounted payback period DCFROR: Discounted cash flowrate of return

A new chemical plant will be constructed. The following data is used for this construction. Using this data; a) Draw the Cumulative Cash Flow Diagram for Nondiscounted and Discounted after-tax cash flows. b) Define the profitability criteria for each Cash Flows (Nondiscounted and Discounted) c) Calculate and show, PBP, CCP, CCR, ROROI, DPBP, NPV, DCFROR on the Cash Flow Diagram. DATA: Cost of Land, L : 5x105 TL FCI, during year 1 : 7x10 TL FCI, during year 2 : 30x10 TL FCI, during year 3 : 50x106 TL Plant start-up at the end of year 3 Working Capital : 20x108 TL at the end of year 3 Yearly sales revenue (after start-up) : R = 80 x10 TL per year Cost of Manufacturing excluding depreciation allowance(after start-up): COM =40 x10TL per year Taxation rate, t = 30% Salvage value of the plant, S = 5x105 TL Total Project life : 8 years Depreciation: Use 3 years after start-up Depreciation = d = FCI - Salvage Value Discount rate = 20% CCR= 1 + (CCP/(Land+WC+FCIL) or CCR = (sum of all positive cash flows / sum of all negative cash flows) ROROI = Average annual net profit/ FCIL PVR = (present value of all positive cash flows/ present value of all negative cash flows) Net Profit = - (R-COM-d)(1-1)+d 12