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NWC
Beg - 5,328,000 6,840,000
End - 5,328,000 - 6,840,000 - 9,000,000
Change in NWC - 5,328,000 - 1,512,000 - 2,160,000
Equipment 21,500,000
Prototype 750,000
Marketing 200,000
OCF 7,880,823 11,446,623 14,917,373
Change in NWC - 5,328,000 - 1,512,000 - 2,160,000
Total Cash Flow - 22,450,000 2,552,823 9,934,623 12,757,373
37,800,000 28,800,000
16,275,000 12,400,000
4,700,000 4,700,000
2,685,350 1,919,950
14,139,650 9,780,050
4,948,878 3,423,018
9,190,773 6,357,033
2,685,350 1,919,950
11,876,123 8,276,983
9,000,000 7,560,000
- 7,560,000 -
1,440,000 7,560,000
11,876,123 8,276,983
1,440,000 7,560,000
13,316,123 15,836,983
Year Total Cash Flow PV
0 - 22,450,000 - 22,450,000
1 2,552,823 2,279,306
2 9,934,623 7,919,820
3 12,757,373 9,080,446
4 13,316,123 8,462,637
5 20,180,810 11,451,134
39,193,342
16,743,342
Year 0 1 2 3
Sales Volume 88,800 114,000 150,000
Unit Price 360 360 360
Variable Cost 155 155 155
NWC
Beg - 6,393,600 8,208,000
End - 6,393,600 - 8,208,000 - 10,800,000
Change in NWC - 6,393,600 - 1,814,400 - 2,592,000
Equipment 21,500,000
Prototype 750,000
Marketing 200,000
OCF 9,852,923 13,978,373 18,248,623
Change in NWC - 6,393,600 - 1,814,400 - 2,592,000
Total Cash Flow - 22,450,000 3,459,323 12,163,973 15,656,623
Book Value 4,796,650 1. How sensitive in the NPV to change in the price of the new
Market Value 4,100,000
Loss on Sale 696,650 Change in Price Price
Tax Benefit in Loss 243,828 -20% 288
Net Inflow 4,343,828 -15% 306
-10% 324
-5% 342
0% 360
5% 378
10% 396
15% 414
20% 432
4 5 Discount Rate 12%
126,000 96,000 NPV $ 25,422,641
360 360 IRR 41.27%
155 155 PI 2.1324116316
45,360,000 34,560,000
19,530,000 14,880,000
4,700,000 4,700,000
2,685,350 1,919,950
18,444,650 13,060,050
6,455,628 4,571,018
11,989,023 8,489,033 2. How sensitive is the NPV to changes in the quantity sold of the new P
2,685,350 1,919,950
14,674,373 10,408,983 Change in Quantity Year 1
-20% 59,200
-15% 62,900
10,800,000 9,072,000 -10% 66,600
- 9,072,000 - -5% 70,300
1,728,000 9,072,000 0% 74,000
5% 77,700
10% 81,400
15% 85,100
20% 88,800
14,674,373 10,408,983
1,728,000 9,072,000
16,402,373 19,480,983
47,872,641
25,422,641