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Spreadsheet 10.1: A. Inputs Initial investment ($ thousands) 15,000 Salvage value ($ thousands) 2,000 Initial revenues ($ thousands) 15,000 Variable costs (% of revenues) 40.0%
Spreadsheet 10.1:
A. Inputs | |||||||
Initial investment ($ thousands) | 15,000 | ||||||
Salvage value ($ thousands) | 2,000 | ||||||
Initial revenues ($ thousands) | 15,000 | ||||||
Variable costs (% of revenues) | 40.0% | ||||||
Initial fixed costs ($ thousands) | 4,000 | ||||||
Inflation rate (%) | 5.0% | ||||||
Discount rate (%) | 12.0% | ||||||
Receivables (% of sales) | 16.7% | ||||||
Inventory (% of next year's costs) | 15.0% | ||||||
Tax rate (%) | 21.0% | ||||||
Year: | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
B. Fixed assets | |||||||
Investments in fixed assets | 15,000 | ||||||
Sales of fixed assets | 1,580 | ||||||
Cash flow from fixed assets | -15,000 | 1,580 | |||||
C. Operating cash flow | |||||||
Revenues | 15,000 | 15,750 | 16,538 | 17,364 | 18,233 | ||
Variable expenses | 6,000 | 6,300 | 6,615 | 6,946 | 7,293 | ||
Fixed expenses | 4,000 | 4,200 | 4,410 | 4,631 | 4,862 | ||
Depreciation | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | ||
Pretax profit | 2,000 | 2,250 | 2,513 | 2,788 | 3,078 | ||
Tax | 420 | 473 | 528 | 586 | 646 | ||
Profit after tax | 1,580 | 1,778 | 1,985 | 2,203 | 2,431 | ||
Operating cash flow | 4,580 | 4,778 | 4,985 | 5,203 | 5,431 | ||
D. Working capital | |||||||
Working capital | 1,500 | 4,075 | 4,279 | 4,493 | 4,717 | 3,039 | 0 |
Change in working capital | 1,500 | 2,575 | 204 | 214 | 225 | -1,679 | -3,039 |
Cash flow from investment in working capital | -1,500 | -2,575 | -204 | -214 | -225 | 1,679 | 3,039 |
0.408 | 0.408 | 0.408 | 0.408 | 0.250 | |||
E. Project valuation | |||||||
Total project cash flow | -16,500 | 2,005 | 4,574 | 4,771 | 4,978 | 7,110 | 4,619 |
Discount factor | 1.000 | 0.893 | 0.797 | 0.712 | 0.636 | 0.567 | 0.507 |
PV of cash flow | -16,500 | 1,790 | 3,646 | 3,396 | 3,164 | 4,034 | 2,340 |
Net present value | 1,870.1 |
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