Homework 9 2010 Solution

Homework 9 2010 Solution - Use the Given Information to...

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Unformatted text preview: Use the Given Information to determine NPV and IRR of the proposed Maximum Score Step 1 50 Step 2 50 Step 3 300 Step 4 300 Sensitivities 300 Total 1000 d investment. Calculate the requested sensitivities Corrected Oxygen Delignification Example Project Year -> Annual Tons 354,828 Depreciation Factor Current Sequence DoEo+pD Annual Depreciation Current Cost per Ton \$27.83 Cost Savings, \$ per Year Proposed Sequence ODoEo+pD EBITDA Proposed Cost per Ton \$16.68 EBIT Annual Savings \$3,956,332 without depreciation Tax at 35% Capital Cost \$17,000,000 Net Income Project Life 10 years Cash Flow, \$ per Year Terminal Value 5 x Year 10 EBITDA ee Cash Flow, \$ per Year Tax 35% (negative tax okay) sh Flow for NPV Calculation Discount Rate 12% NPV @ 15% IRR 1 2 3 14.29% 24.49% 17.49% 12.49% \$2,429,300 \$4,163,300 \$2,973,300 \$2,123,300 \$3,956,332 \$3,956,332 \$3,956,332 \$3,956,332 \$6,385,632 \$8,119,632 \$6,929,632 \$6,079,632 \$1,527,032 \$(206,968) \$983,032 \$1,833,032 \$534,461 \$(72,439) \$344,061 \$641,561 \$992,571 \$(134,529) \$638,971 \$1,191,471 \$3,421,871 \$4,028,771 \$3,612,271 \$3,314,771 \$(13,578,129) \$4,028,771 \$3,612,271 \$3,314,771 \$(13,578,129) \$4,028,771 \$3,612,271 \$3,314,771 \$6,106,109.53 26% 4 5 6 7 8.93% 8.92% 8.93% 4.46% \$1,518,100 \$1,516,400 \$1,518,100 \$758,200 \$3,956,332 \$3,956,332 \$3,956,332 \$3,956,332 \$5,474,432 \$5,472,732 \$5,474,432 \$4,714,532 \$2,438,232 \$2,439,932 \$2,438,232 \$3,198,132 \$853,381 \$853,976 \$853,381 \$1,119,346 \$1,584,851 \$1,585,956 \$1,584,851 \$2,078,786 \$3,102,951 \$3,102,356 \$3,102,951 \$2,836,986 \$3,102,951 \$3,102,356 \$3,102,951 \$2,836,986 \$3,102,951 \$3,102,356 \$3,102,951 \$2,836,986 8 9 10 0.00% 0.00% 0.00% \$-...
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This note was uploaded on 08/22/2011 for the course WPS 491 taught by Professor Phillips during the Spring '11 term at N.C. State.

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Homework 9 2010 Solution - Use the Given Information to...

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