ch12boc-model

# ch12boc-model - A 1 B C D E F G H I Worksheet for Chapter...

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1 of 8 3/17/03 Input Data (totals in thousands) For Displayed Scenario Analysis Data: Scenario Good Base Bad Scenario Shown Base Equip. cost, 2004 (= Depr'ble basis) \$50,000 Net Operating WC / Next year's sales 5% Sales price per mwh, 1st Year \$100 \$150 \$100 \$75 Variable cost per unit, 1st Year \$60.00 \$50 \$60 \$70 Data that Units of output sold, 1st Year 450 550 450 200 change WACC 12% 10% 12% 14% 1st year fixed costs \$1,300 Market value of plant in 2007 \$5,000 The Scenario Analysis tool substitutes the above data into Cells D5 an Tax rate 40% D8:D11 and then calculates the results with that set of data. Also, Growth rate in output 2.0% the tool generates a Scenario Summary and displays it on a Inflation: growth in sales price 2.0% Inflation: growth in VC per unit 2.0% See a later section in the model for why we choose to vary these input Inflation: growth in fixed costs 1.0% See the BOC model for Chapter 10 for more on Scenario Analysis. Key Output: NPV = \$3,203 IRR = 14.3% MIRR = 13.3% Depreciation Years 2,005 2,006 2,007 2,008 2,009 Depr'n Rate 20.0% 32.0% 19.0% 12.0% 11.0% Depr'n \$10,000 \$16,000 \$9,500 \$6,000 \$5,500 Ending Book Val: Cost - Cum. Depr'n 40,000 24,000 14,500 \$8,500 \$3,000 Net Salvage Value in 2009 Estimated Market Value in 2009 \$5,000 Book Value in 2009 3,000 Expected Gain 2,000 Taxes paid or tax credit -800 Net cash flow from salvage in 2009 \$4,200 Projected Net Cash Flow 2004 2005 2006 2007 2008 2009 Equipment cost -\$50,000 Units sold (kilowatt hours) 450 459 468 478 487 Sales price \$100.00 \$102.00 \$104.04 \$106.12 \$108.24 Sales revenue \$45,000 \$46,818 \$48,709 \$50,677 \$52,725 Variable cost/unit \$61.20 \$62.42 \$63.67 \$64.95 \$66.24 Variable costs \$27,540 \$28,653 \$29,810 \$31,015 \$32,267 Fixed operating costs \$1,300 \$1,313 \$1,326 \$1,339 \$1,353 Depreciation \$10,000 \$16,000 \$9,500 \$6,000 \$5,500 Oper. income before taxes (EBIT) \$6,160 \$852 \$8,073 \$12,323 \$13,604 Taxes on operating income (40%) \$2,464 \$341 \$3,229 \$4,929 \$5,442 NOPAT \$3,696 \$511 \$4,844 \$7,394 \$8,163 Operating cash flow: (NOPAT + Dep'rn) \$13,696 \$16,511 \$14,344 \$13,394 \$13,663 Net Op. W. C. (% of next yr sales) \$2,250 \$2,341 \$2,435 \$2,534 \$2,636 Req'd investment in NOWC -2,250 -91 -95 -98 -102 Return of NOWC 2,636 Net salvage cash flow from above 4,200 Net Cash Flow time line -52,250 \$13,605 \$16,417 \$14,245 \$13,292 \$20,499 Net Present Value (at 12%) \$3,203 IRR 14.34% Worksheet for Chapter 12 BOC Questions. Cash Flow Estimation and Risk Analysis (ch12BOC-Model) This spreadsheet illustrates the answers to the Chapter 12 BOC questions. The Excel functions used here were explained in detail in earlier models, so to avoid clutter detailed explanations are generally omitted. In particular, note that detailed instructions on how to use the Scenario Analysis Tool were provided in the BOC models for Chapters 8 and 10.

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