In: Finance
Rucas Plc | |||||
NPV Calculation | |||||
All amount sin currency Aira (AR) | Year 1 | Year 2 | Year 3 | Year 4 | |
Equipment Cost | 3,500,000 | ||||
Depreciation @20% reducing balance | 700,000 | 560,000 | 448,000 | 358,400 | |
Total Depreciation | 2,066,400 | ||||
Book Value after 4 Years | 1,433,600 | ||||
Resale value | 1,250,000 | ||||
There is no capital gain so no tax appliable on resale |
Sales details | |||||
Units sold with 3% annual increase | 3,000 | 3,090 | 3,183 | 3,278 | |
Unit price with 6% annual inflation | 950 | 1,007 | 1,067 | 1,131 | |
Sales Revenue | 2,850,000 | 3,111,630 | 3,397,278 | 3,709,148 | |
Working capital @10% of sales | 285,000 | 311,163 | 339,728 | 370,915 | |
Increase in WC over prev year | 285,000 | 26,163 | 28,565 | 31,187 | (370,915) |
Cash flow details | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Initial Investment | |||||||
Equiment cost | (3,500,000) | ||||||
Net Working Capital Investment | (285,000) | (26,163) | (28,565) | (31,187) | |||
a | Total Initial Investment + WC Investment | (3,785,000) | (26,163) | (28,565) | (31,187) | ||
Cash flow from operations | |||||||
Sales Revenue | 2,850,000 | 3,111,630 | 3,397,278 | 3,709,148 | |||
Less Cost of Manufacturing with 6% annual inflation | 1,710,000 | 1,978,997 | 2,290,309 | 2,650,593 | |||
Less Fixed cost with 6% annual inflation | 60,000 | 63,600 | 67,416 | 71,461 | |||
Depreciation | 700,000 | 560,000 | 448,000 | 358,400 | |||
EBT | 380,000 | 509,033 | 591,553 | 628,694 | |||
Tax @25% | 95,000 | 127,258 | 147,888 | 157,174 | |||
PAT | 285,000 | 381,775 | 443,665 | 471,521 | |||
Add back depreciation | 700,000 | 560,000 | 448,000 | 358,400 | |||
Add Tax not payable in the cuurent year | 95,000 | 127,258 | 147,888 | 157,174 | |||
Less Tax payable in arrear | - | (95,000) | (127,258) | (147,888) | (157,174) | ||
b | Net Cash flow from Operations | 1,080,000 | 974,033 | 912,295 | 839,206 | (157,174) | |
Terminal cash flows | |||||||
Equipment salvage value | 1,250,000 | ||||||
Return pf WC | 370,915 | ||||||
Total Terminal
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