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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