Shayon%20Motamedi-Fin173A-%2010-7%20HW(1)

Shayon%20Motamedi-Fin173A-%2010-7%20HW(1) - Expected Net...

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Expected Net Cash Flows Year  A B 0 -$375 -$575 1 -$300 $190 2 -$200 $190 3 -$100 $190 4 $600 $190 5 $600 $190 6 $926 $190 7 -$200 $0 NPV: $226.96 $206.17 NPV@18%: 18.24 89.54 1.12 1.2 1.13 IRR= 1.21% Payback Period @12% 5.38 4.03 The discounted Excel: Practice Brigham Spreadsheeet P
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roblems 12-18, 13-11 and 14-9 (Do not worry about Black Scholes). Practice More using Holden Chapter prob
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blems (9 maybe, 12, 13, 15, 16 definitely) of Firm and Project Valuation, Financial Planning and DuPont Analys
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sis. 
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Equipment Cost 10000000, $500,000 Salvage value after 4 years NOWC 10% Net Sales Recession Depression 24,000 per unit 24000000 21600000 19200000 Fixed Costs 1,000,000 1,000,000 Variable Costs 17,500 per unit 17500000 Profit Margin: 5,500,000 NPV: Year Costs Profit Margin Real Cash Flows 0 -10,000,000 - -10,000,000 1 -1,000,000 5,665,000 -5,335,000 2 -1,000,000 5,834,950 499,950 3 -1,000,000 6,009,999 5,009,999 4 -1,000,000 6,190,298 5,190,298 5 500,000 6,376,007 6,876,007 NPV 744500368915 0.1 NPV Slow:20% NPV Recession: 10% IRR At 5% The Revenue is close relatively close to Zero @ -642K 1.05 -642054.81 Payback Period 2.5 EBIT 1,344,753
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3% increase after one year
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Year  Cost CF: Good, 30% CF: Medium, 4CF: Bad, 30% 0 -10,000,000 -10,000,000 1 9,000,000 4,000,000 -1,000,000 2 9,000,000 4,000,000 -1,000,000 3 9,000,000 4,000,000 -1,000,000 Real Cash Flows Good Medium Bad -1,000,000 NPV 11616481.41 -392674.93 -12401831.27 Average 392674.93 Coefficient of Variation ### 1.12
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Five Equivalent Methods Inputs Valuation Object 1 Date 0 Proj In $360.00 Tax Rate 40.0% Unlevered Co 10.0% Riskfree Rate 3.0% Inf Horiz Grow 5.0% 1 Cash Flows 2nd Stage: First Stage: Finite Horizon Infin Horiz Date 0 1 2 3 4 5 6 Revenues $550.00 $590.00 $620.00 $655.00 $675.00 $740.00 Expenses $410.00 $435.00 $445.00 $470.00 $470.00 $475.00 Gross Earnings $140.00 $155.00 $175.00 $185.00 $205.00 $265.00 Depreciation $60.00 $60.00 $60.00 $60.00
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This note was uploaded on 09/08/2010 for the course BUS 173A at San Jose State University .

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Shayon%20Motamedi-Fin173A-%2010-7%20HW(1) - Expected Net...

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