Merafe Mining3.png - A B C D E F G H J 56 1.5 Estimate the required net working capital for each year and the cash flow due to investments in net

Merafe Mining3.png - A B C D E F G H J 56 1.5 Estimate the...

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Unformatted text preview: A B C D E F G H J 56 1.5. Estimate the required net working capital for each year, and the cash flow due to investments in net working capital. 57 Annual Cash Flows due to Investments in Net Operating Working Capital 58 59 Year 0 Year 1 Year 2 Year 3 Year 4 60 Sales 250000 257500 265225 273187.5 61 NOWC (% of sales) 30000 30900 31827 32783 62 CF due to investment in NOWC) -30000 -900 -927 -956 32783 63 64 1.6. Calculate the after-tax salvage cash flow. 65 66 After-tax Salvage Value 67 68 Salvage Value 25000 69 Tax on Salvage Value 10000 70 Net Terminal Cash Flow 15000 71 72 1.7. Calculate the net cash flows for each year. Based on these cash flows and the average project cost of capital, 73 what are the project's NPV, IRR, PI, payback, and discounted payback? Do these indicators suggest that the project 74 should be undertaken? 75 76 Projected Net Cash Flows 77 Year 0 Year 1 Year 2 Year 3 Year 4 78 79 Investment Outlay: Long Term Assets -240000 80 Operating Cash Flows 106680 120450 93967.5 88680 81 CF due to investment in NOWC -30000 900 -927 -955.5 32782.5 82 Salvage Cash Flows 15000 83 Net Cash Flows -270000 105780 119523 93012 136463 84 85 NPV < 88,029.99 NPV(10%, F84:184) + E84 86 IRR 23.91% 87 < 3,58,029.99 524191.71...
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