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case2_04 - GulfCoastFisheries,INC By RobbertMiddelbeek...

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    Gulf Coast Fisheries, INC. Capital Budgeting with Staged Entry By:  Robbert Middelbeek Rian Pollaert Tangela Arends
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Agenda Catfish Project Casts involving land acquisition Cash flows NPV, IRR, MIRR and Payback Decision trees Changes in the situation Sensitivity Analysis, Scenario Analysis and  Monte Carlo Simulation Conclusions… 
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Costs involving land acquisition 1.5 mil is used Taking into account the option: Value: 1.500.000 * 1,09^4 = $ 2.117.372,4  Gain form option: $ 2.117.372,4 - $ 1.900.000 /  (1,04)^4 = $ 185.810,8  Profit: $ 185.810,8 - $ 100.000 = $ 85.810,8  Discount rate used: 4 % , general inflation rate
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CF Large Plan, HD- HG End of Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 Land -1.500 R&D Expense -240 80 80 80 Building -5.000 Equipment Cost -10.000 Working Capital -5.500 -792 -906 -1.037 -1.186 -1.357 -1.552 0 Total capital -1.740 -20.500 -712 -826 -957 -1.186 -1.357 -1.552 0 Sales 22.000 25.168 28.792 32.938 37.681 43.107 49.315 Variable cost 13.200 15.101 17.275 19.763 22.609 25.864 29.589 Fixed cost 6.000 6.240 6.490 6.749 7.019 7.300 7.592 Depreciation 1.590 2.610 1.910 1.410 1.050 1.050 1.050 Operating Income 0 0 1.210 1.217 3.117 5.016 7.003 8.893 11.084 Tax 0 0 484 487 1.247 2.006 2.801 3.557 4.434 Net income 0 0 726 730 1.870 3.010 4.202 5.336 6.650 Depreciation 0 0 1.590 2.610 1.910 1.410 1.050 1.050 1.050 Op Cash flow 0 0 2.316 3.340 3.780 4.420 5.252 6.386 7.700 Cap Cash flow -1.740 -20.500 -712 -826 -957 -1.186 -1.357 -1.552 0 Terminal value 53.204 Net cash flow -1.740 -20.500 1.604 2.514 2.824 3.234 3.896 4.834 60.904
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CF Small Plan, HD-HG End of Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 Land -1.500 R&D Expense -240 80 80 80 Building -2.000 -4.000 Equipment Cost -6.000 -6.000 Working Capital -5.940 -238 -247 -3.457 -1.423 -1.628 -1.862 0 Total capital -1.740 -13.940 -158 -167 -13.377 -1.423 -1.628 -1.862 0 Sales 19.800 20.592 21.416 32.938 37.681 43.107 49.315 Variable cost 12.870 13.385 13.920 21.410 24.493 28.020 32.055 Fixed cost 3.000 3.120 3.245 6.375 6.630 6.895 7.171 Depreciation 922 1.534 1.114 1.800 2.412 1.992 1.692 Operating Income 0 0 3.008 2.553 3.137 3.354 4.147 6.201 8.398 Tax 0 0 1.203 1.021 1.255 1.342 1.659 2.480 3.359 Net income 0 0 1.805 1.532 1.882 2.012 2.488 3.721 5.039 Depreciation 0 0 922 1.534 1.114 1.800 2.412 1.992 1.692 Op Cash flow 0 0 2.727 3.066 2.996 3.812 4.900 5.713 6.731 Cap Cash flow -1.740 -13.940 -158 -167 -13.377 -1.423 -1.628 -1.862 0 Terminal value 40.309 Net cash flow -1.740 -13.940 2.569 2.899 -10.381 2.389 3.272 3.850 47.040
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NPV, IRR, MIRR and Payback Small Plan, HD-HG NPV 10.049 IRR 18,86% MIRR 12,66% Payback 7,24 Large Plan, HD-HG NPV 19.867 IRR 23,31% MIRR 18,46% Payback 7,055
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Large Plan Decision Tree
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