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Excel - Copy - Copy - Inflation Rate Hi-Tech Year...

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Inflation Rate 3% Hi-Tech Year 0 1 2 3 4 5 6 Incremental Net Income 96,893 Add: Incremental Depreciation 416,667 Operating cash flow 513,560 528,967 544,836 561,181 578,016 595,357 Increase with inflation Initial Investment 4,500,000 Broker Year 0 1 2 3 4 5 6 Incremental Net Income 10,976 Add: Incremental Depreciation 416,667 Operating cash flow 427,642 440,472 453,686 467,296 481,315 495,755 Increase with inflation Initial Investment 4,500,000 Flame Retardant + coating Year 0 1 2 3 4 5 6 Liters sold (flame retardant) 62.04 Liters sold (coating)) 310.2 Sale Price per liter (flame) 10.00 Sale Price per liter (coating) 27.50 Cost Price per liter (flame) 10.00 Cost Price per liter (coating) 25.00 Total Revenue 9,150.90 Total cost 8,375.40 Income before tax 775.50 Tax (42%) 325.71 Net Income 449.79 463.28 477.18 491.50 506.24 521.43 Increase with inflation We put all the three alternatives below Year 0 1 2 3 4 5 6 Hi- Tech 513,560 528,967 544,836 561,181 578,016 595,357 Broker 427,642 440,472 453,686 467,296 481,315 495,755 Flame Retardant + coating 449.79 463.28 477.18 491.50 506.24 521.43 Discounting rate 5.70% The present value of cash flows is Option NPV of cash flows Hi- Tech ($1,764,750.44) Broker ($2,222,352.94) Flame Retardant + coating $2,395.61 Sensitivity Analysis Hi-Tech Broker Flame retardant+coating WACC (1,764,750) (2,222,353) 2,396 0% (1,178,084) (1,733,835) 2,909 2% (1,404,042) (1,921,990) 2,712 4% (1,607,470) (2,091,385) 2,533 6% (1,791,138) (2,244,326) 2,372 8% (1,957,421) (2,382,790) 2,227 10% (2,108,362) (2,508,479) 2,095 Sensitivity Analysis Hi-Tech Broker Flame retardant+coating Inflation Rate (1,764,750) (2,222,353) 2,396 0% (1,950,680) (2,377,177) 2,233 1% (1,890,287) (2,326,887) 2,286 2% (1,828,322) (2,275,289) 2,340 3% (1,764,750) (2,222,353) 2,396 4% (1,699,538) (2,168,050) 2,453 5% (1,632,647) (2,112,350) 2,511 6% (1,564,043) (2,055,224) 2,571 7% (1,493,688) (1,996,639) 2,633 8% (1,421,545) (1,936,566) 2,696 0 0.02 0.04 0.06 0.08 0.1 0 500000 1000000 1500000 2000000 2500000 3000000 3500000 Sensitivity Analysis Hi-Tech Broker
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Excel - Copy - Copy - Inflation Rate Hi-Tech Year...

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