corp_Ch11_09

corp_Ch11_09 - WEEK I I (All anlyses are based on the...

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Unformatted text preview: WEEK I I (All anlyses are based on the Scooter example in Chapte 11) Break-Even Analysis Sensitivity Analysis Value of Information Value of Information (2) - imperfect study ( optional) Monte-Carlo Simulation Frequency Distrubution of NPV from the Monte-Carlo Simulation The Abandonment Option from the simulation Decision Trees and the abandonment option r Millions of Yen Expected Other Base variables Values Scenarios Unit sales 0.100 0.2 unit price 0.375 0.375 0.375 unit variable cost 0.300 0.300 0.300 fixed cost 3000.000 3000.000 3000.000 Proforma P&L Revenues 37500 75000 Variable cost 30000 60000 Fixed cost 3000 3000 3000 Copy for graph Depreciation 1500 1500 1500 Unit sales PV (Inflows) PV(Outflows) Pre-tax profit 3000-4500 10500 19608 Tax 1500-2250 5250 0.1 230421 226988 Net profit 1500-2250 5250 0.2 460843 434367 Operating CF 3000-750 6750 Investment 15000 15000 15000 PV (Inflows) 230421 460843 PV(Outflows) 226988 19608 434367 NPV 3434-19608 26476 Solve for NPV BE Q(BE)=0.1*19608/(19608+3434)= 0.085098 million Accounting BE from lines 3 and 14 Q(BE)=0.1*2250/(2250+1500) 0.060000 million "Fixing" the accounting BE EAC of investement using PMT function 2,441.18 (million Yen) Adjusting line 14 "net profit" 558.82 (3,191.18) 4,308.82 Q(BE) 0.085098 (milloin Yen) This table is based on the expected values fro worksheet and the sales figures given in Table Check the cells that show PV of inflows, outflo The graph shows the BE NPV and the exact c (by interpolation). Produce a similar graph for Table 10.5 and see that this BE point is differe-0.04 0.01 0.06-100000 100000 200000 300000 400000 500000 NPV Break P Unit sales in PV and NPV in million Yen NPV This means we assume the firm can charge losses against profits fro-19608 3434 26476 I T*pv(0.1,10,I/10) Using formulaQ(NPV BE) = ------------------------------ (1T)* pv(0.1,10,vcp) $85,098.16 Note: CF from deprectiation appears in NPV also in scenarios where om the sensitivity analysis le 10.4. ows and NPV. calculation is shown to the left of it r profit BE based on the figures in ent from the NPV BE point. 0.11 0.16 0.21 Even PV (Inflows) PV(Outflows) NPV in millions om other projects. e pre-tax profits are negative. Millions of Yen/uni Expected Sensitivity to Market size Sensitivity to market shar Sensitivity to Unit price Base variables Values +20 percent -20 percent +20 percent -20 percent +20 percent -20 percent Sensitivity factor 1.20 0.80 1.20 0.80 1.20 0.80 market size (units) 1.000 1.2 0.8 1.000 1.000 1.000 1.000 market share 0.100 0.100 0.100 0.12 0.08 0.100 0.100 unit price 0.375 0.375 0.375 0.375 0.375 0.45 0.3 unit variable cost 0.300 0.300 0.300 0.300 0.300 0.300 0.300 fixed cost 3000 3000 3000 3000...
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This note was uploaded on 05/06/2010 for the course IRPS IRGN 424 taught by Professor Kane during the Fall '09 term at UCSD.

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corp_Ch11_09 - WEEK I I (All anlyses are based on the...

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