Case Study: Equipment

Date
CASE STUDY EXAMPLE UNIDO WITH THE SAME CONCEPTION FOR BAN
THOU $
1 Fixed investments 8300 Equipment

land 300 including 500 $
buildings 1800 preproduction expenditure
equipment 5200
cars 1000 Cars
2 Working capital 2000 replacement of cars in
3 Other current assets 400 year 8
4 Sources of financing 10700
accounts payable 400 Suppliers' credits
suppliers' credits 3000 interest 8%
bank overdraft 1500 repayment 5 years
equity 5800
5 Sales revenue 12500 Bank overdrafts
6 Production cost 9780 75% of working capital
variable costs 6500 interest 9%
fixed costs 3280 repayment 5 years
other fixed costs 2500
straight line depreciation 780 Sales revenue
7 Construction period (years) 2 2000 000 units
8 Corporate tax 50% 6.25 $ per unit
9 Exemption of taxes 5
10 Dividends (on equity) 4% Straight line depreciation
11 Operating years 10 buildings 30 years
The schedule of production equipment 10 years
cars 5 years
Year Capacity Annual Operating
utilization sales costs
1 55% 6875 6008
2 75% 9375 7338
3 80% 10000 7670
4-10 100% 12500 9000
BREAK EVEN POINT

p=unit sales price = 6.25 v=unit variable cost= $ 3.25 f=unit fixed cost 1.64
BEPunits=F/p-v 1093.333
BEPvalues=p*BEPunits 6833.333 or F/((Q-V/Q)) = 6833.333
BEP%=F/(Q-V) 0.546667
CONTRIBUTION MARGIN(Q-V)= 6000 Thou$

UNIT CONTRIBUTION MARGIN (p-v)= 3 $/unit
CONTRIBUTION MARGIN RATIO(Q-V) 48.00% or (p-v)/p $ 0.48
SECURITY MARGI (NET PROFIT MARGIN)

(p-c)/p= 21.76% or(Q-C)/Q 0.2176
Page 1
Date
1-BEP%= 45.33% POSITION OF THE COMPANY TO BEP
DE ADAUGAT DE PE STICK in folderul ANDREEA BADEA
Page 2
Date
E CONCEPTION FOR BANK OVERDRAFT
c=unit cost 4.89 (π)= profit/unit 1.36
Page 3
d
- angajamente curente
Page 4
10-1.1
Schedule 10 - 1/1
Initial fixed investments costs
Item Investment category Total cost
1 Land 300
2 Site preparation and 1120
development
3 Structures, civil works
buildings, civil works 1800
auxiliary and service 600
facilities
4 Incorporat. fixed assets 500
5 Plant machinery and 3480
equipment
6 Total initial fixed 7800
investment costs
Page 5
10-1.2
Schedule 10 - 1/2
Construction period 2
Fixed investment costs Start up 3
Total (years) 12
Period constr. constr. start-up start-up start-up full full full full
Year 1 2 3 4 5 6 7 8 9
1.Land 300 0 0 0 0 0 0 0 0
2.Site preparation 920 0 0 0 0 0 0 0 0
and development
3.Structures and civil 400 1400 0 0 0 0 0 0 0
work
4.Intangible 500 0 0 0 0 0 0 0 0
fixed assets
5.Plant and mach. 880 3400 0 0 0 0 0 1000 0
Fixed investments
total costs. 3000 4800 0 0 0 0 0 1000 0
Page 6
10-1.2
full full full TOTAL

10 11 12
0 0 0 300
0 0 0 920
0 0 0 1800
0 0 0 500
0 0 0 5280
0 0 0 8800
Page 7
10-2.1
Schedule 10 - 2/1
Preproduction capital expenditures by category
Item Category Total

1 Preinvestment studies 30
2 Preparatory investigations 30
3 Management of project implementation 30
4 Detail planning tendering 40
5 Supervision co-ordination, test-run and 100
take-over of civil works equip. and plant
6 Build-up of administration recruitment 50
and training of staff and labour
7 Arrangements for suppliers 65
8 Arrangements for marketing 65
9 Build-up connections 90
10 Preliminary and capital issue expenditure 70
TOTAL 500
Page 8
10-2.2
Schedule 10 - 2/2
Construction (years) 2
Preproduction capital expenditure Start-up (years) 3
Total years 12
Period constr. constr. start-up start-up start-up full full full full
Year 1 2 3 4 5 6 7 8 9
1. Preproduction 300 200 0 0 0 0 0 0 0
capital expenditure
Page 9
10-2.2
full full full TOTAL

10 11 12
0 0 0 500
Page 10
10-3.1
Schedule 10 - 3/1
Calculation of working capital
CAP. I Minimum requirements of current assets and liabilities
1 ACCOUNTING RECEIVABLE 30 days Production costs +

line depreciation -
interest -
2 INVENTORY raw mater A at100%
local raw material A 30 days raw mater B at 100%
local raw material B 14 days raw mater imported
imported raw material 100 days labor
spare parts 180 days utilities
work in progress 9 days at factory costs(COGS or COS) repair
finished products 15 days at factory costs and maintenanc
administrative overheads fact.overh
3 CASH IN HAND 15 days see calculations in sch. 10 -3/2 adm overh
4 ACCOUNTS PAYABLE 30 days for raw materials and sales cost
utilities distrib.cost
Construction years 2
CAP. II Annual production-cost estimate Start-up years 3
Total years 12
Period constr. constr. start. start. start. full-cp. full-cp. full-cp.

year 1 2 3 4 5 6 7 8
Production programme 0% 0% 55% 75% 80% 100% 100% 100%
1.Raw materials
A 0 0 907.5 1237.5 1320 1650 1650 1650
B 0 0 275 375 400 500 500 500
imported 0 0 1265 1725 1840 2300 2300 2300
2.Labor 0 0 687.5 937.5 1000 1250 1250 1250
3.Utilities 0 0 247.5 337.5 360 450 450 450
4.Repair 0 0 192.5 262.5 280 350 350 350
5.Maintenance spare parts 0 0 250 250 250 250 250 250
6.Factory overheads costs 0 0 1350 1350 1350 1350 1350 1350
Factory costs 0 0 5175 6475 6800 8100 8100 8100
1.Administrative overhead 0 0 500 500 500 500 500 500

2.Sales costs 0 0 250 250 250 250 250 250
3.Distribution costs 0 0 82.5 112.5 120 150 150 150
Page 11
10-3.1
Operating costs 0 0 6007.5 7337.5 7670 9000 9000 9000
1.Financial costs 0 0 375 327 279 176 88 0

2.STRAIGHT Line depreciation 0 0 780 780 780 780 780 780
TOTAL PRODUCTION COSTS 0 0 7162.5 8444.5 8729 9956 9868 9780
suppliers' credits 240 192 144 96 48

bank overdraft 135 135 135 80 40
Suppliers' credits Bank overdraft

year total interst Total payments Total year total interest
to pay per year paid to pay per year
1 3,000 240 3,240 600 840 1 1,500 135
2 2,400 192 2,592 600 792 2 1,500 135
3 1,800 144 1,944 600 744 3 1,500 135
4 1,200 96 1,296 600 696 4 900 80
5 600 48 648 600 648 5 450 40
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
TOTAL : 720 3,000 3,720 TOTAL : 525
Page 12
10-3.1
at100%
1650
500
2300
1250
450
350
250
1350
500
250
150
full-cp. full-cp. full-cp. full-cp. TOTAL

9 10 11 12
100% 100% 100% 100%
1650 1650 1650 1650 15015

500 500 500 500 4550
2300 2300 2300 2300 20930
1250 1250 1250 1250 11375
450 450 450 450 4095
350 350 350 350 3185
250 250 250 250 2500
1350 1350 1350 1350 13500
8100 8100 8100 8100 75150
500 500 500 500 5000

250 250 250 250 2500
150 150 150 150 1365
Page 13
10-3.1
9000 9000 9000 9000 84015
0 0 0 0 1245
780 780 780 780 7800
9780 9780 9780 9780 93060
Total payments Total

paid
1,635 0 135
1,635 0 135
1,635 600 735
980 450 530
490 450 490
0
0
0
0
0
1,500 2,025
Page 14
10-3.2
Schedule 10 - 3/2
Start-up (years) 3
Calculation of working capital Total years 12
Period Minimum Coeficient constr. constr. start. start. start. full-cp.

Year days of of 1 2 3 4 5 6
Production programme coverage turnover 0% 0% 55% 75% 80% 100%
I- CURRENT ASSETS
A. Accounts receivable 30 12 0 0 500.6 611.5 639.2 750

B. Inventory
a. raw material
material A 30 12 0 0 76 103 110 138
material B 14 25.7 0 0 11 15 16 19
imported 100 3.6 0 0 351 479 511 639
b. spare parts 180 2 0 0 125 125 125 125
c. work in progress 9 40 0 0 129 162 170 202.5
d. finished products 15 24 0 0 236 291 304 358
C. Cash in hand 15 24 0 0 154 166 168 178
TOTAL CURRENT ASSETS 0 0 1583 1952 2043 2410
II- CURRENT LIABILITIES
A. Accounts payable 30 12 0 0 225 306 327 408
III- WORKING CAPITAL
A. Net 0 0 1358 1646 1716 2002

B. increase 0 0 1358 288 70 285
IV-TOT. PRODUCTION COST 0 0 7162.5 8444.5 8729 9956

less
raw material 0 0 2447.5 3337.5 3560 4450
utility 0 0 248 338 360 450
depreciation 0 0 780 780 780 780
TOTAL : 0 0 3687.5 3989.5 4029 4276
Required cash balance 15 24 0 0 154 166 168 178
Page 15
10-3.2
full-cp. full-cp. full-cp. full-cp. full-cp. full-cp. TOTAL

7 8 9 10 11 12
100% 100% 100% 100% 100% 100%
750 750 750 750 750 750 7001
138 138 138 138 138 138 1251

19 19 19 19 19 19 177
639 639 639 639 639 639 5814
125 125 125 125 125 125 1250
202.5 202.5 202.5 202.5 202.5 202.5 1879
358 358 358 358 358 358 3340
175 171 171 171 171 171 1695
2406 2403 2403 2403 2403 2403 22406
408 408 408 408 408 408 3716
1998 1994 1994 1994 1994 1994 18690

-3.666667 -3.666667 0 0 0 0 1994
9868 9780 9780 9780 9780 9780 93060
4450 4450 4450 4450 4450 4450 40495

450 450 450 450 450 450 4095
780 780 780 780 780 780 7800
4188 4100 4100 4100 4100 4100 40670
175 171 171 171 171 171 1695
Page 16
10-6.1
Schedule 10 - 6/1
Total initial investments costs
Item Inventory category Total

1 Initial fixed investment costs 7800
2 Preproduction capital expenditures 500
3 Working capital (at full capacity) 2002
TOTAL 10302
Page 17
10-6.2
Schedule 10 - 6/2
Start-up (years) 3
Total investment costs Total years 12

Year 1 2 3 4 5 6 7 8
1. Fixed investments costs 3000 4800 0 0 0 0 0 1000

2. Preprod. capital expenditures 300 200 0 0 0 0 0 0
3. Increase of working capital 0 0 1358 288 70 285 -3.666667 -3.666667
Total investments costs 3300 5000 1358 288 70 285 -3.666667 996
Page 18
10-6.2
2
3

9 10 11 12
100% 100% 100% 100%
0 0 0 0 8800
0 0 0 0 500
0 0 0 0 1994
0 0 0 0 11294
Page 19
10-7.1
Schedule 10 - 7/1
Total assets
Item Investment category Source Total

1 Fixed initial investment costs 10-1.1 7800
2 Preprod. capital expenditures 10-2.1 500
3 Current assets 10-3.2 2410
TOTAL 10710
Page 20
10-7.2
Schedule 10 -7/2
Start-up (years) 3
Total investments costs Total years 12

Year 1 2 3 4 5 6 7 8
Production Programme 0% 0% 55% 75% 80% 100% 100% 100%
1. Fixed investments costs 3000 4800 0 0 0 0 0 1000

2. Preprod. capital expenditures 300 200 0 0 0 0 0 0
3.Current assets 0 0 1583 369 91 367 -3.666667 -3.666667
Total assets 3300 5000 1583 369 91 367 -3.666667 996
Page 21
10-7.2
2
3

9 10 11 12
100% 100% 100% 100%
0 0 0 0 8800
0 0 0 0 500
0 0 0 0 2403
0 0 0 0 11703
Page 22
10-8.1
Schedule 10 - 8/1
Suorces of finance
Item Sources of finance Total

1 Promoters
a. Equity (common stock) 3500
b. Preference capital 0
c. Loans 0
d. other forms such as deferred credits for 0
supply of know-how or equipment
Total : 3500
2 Collaborators
c. Loans 0
d. other forms such as deferred credits for 0
supply of know-how or equipment
Total : 2300
3 Financial institutions or development
agencies
c. Loans 0
d.Other forms 0
Total : 0
4 Government
a Loans 0
b. Subsidy 0
Total : 0
5 Commercial banks 1500
6 Public subscriptions 0
7 Suppliers' credits 3000
8 Current liabilities 400
TOTAL 10700
Page 23
10-8.2
Schedule 10 -8/2
Sources of initial fonds Construction (years) 2

Start-up (years) 3
Total years 12

Year 1 2 3 4 5 6 7 8
1. Equity capital 3300 2500 0 0 0 0 0 0

2. Preference 0 0 0 0 0 0 0 0
3. Loans 0 1500 0 0 0 0 0 0
4. Suppliers' credits 0 3000 0 0 0 0 0 0
5. Current liabilities increase 0 0 225 82 20 82 0 0
6. Subsidy
7. Public subscriptions
TOTAL 3300 7000 225 82 20 82 0 0
Page 24
10-8.2
2
3

9 10 11 12
100% 100% 100% 100%
0 0 0 0 5800
0 0 0 0 0
0 0 0 0 1500
0 0 0 0 3000
0 0 0 0 408
0 0 0 0 10708
Page 25
10-9
Schedule 10 -9
Net income statement Construction (years) 2

Start-up (years) 3
Total years 12
Period constr. constr. start. start. start. full-cp. full-cp.

Year 1 2 3 4 5 6 7
Production programme 0% 0% 55% 75% 80% 100% 100%
COSTS ($ thousands)
1. Sales 0 0 6875 9375 10000 12500 12500

2. Production costs 0 0 7163 8445 8729 9956 9868
3. Gross of taxable profit 0 0 -287.5 930.5 1271 2544 2632
4. Tax 0 0
5. Net profit 0 0 -287.5 931 1271 2544 2632
6. Dividends 0 0 232 232 232 232 232
7. Undistributed profit 0 0 -519.5 699 1039 2312 2400
8. Accumulated undistributed profits 0 0 -519.5 179 1218 3530 5930
RATIOS
1. gross profit/ sales % 0% 0% -4% 10% 13% 20% 21%

2. net profit/ sales % 0% 0% -4% 10% 13% 20% 21%
3. net profit/ equity % 0% 0% -5% 16% 22% 44% 45%
3000
2500
2000
1500
1000
500
0
1 3 5 7 9 11
-500
Page 26
10-9
2
3
full-cp. full-cp. full-cp. full-cp. full-cp. TOTAL

8 9 10 11 12
100% 100% 100% 100% 100%
12500 12500 12500 12500 12500 113750

9780 9780 9780 9780 9780 93060
2720 2720 2720 2720 2720 20690
1360 1360 1360 1360 1360 6800
1360 1360 1360 1360 1360 13890
232 232 232 232 232 2320
1128 1128 1128 1128 1128 11570
7058 8186 9314 10442 11570 GOES TO 10/10 LIABILITIES:RESERVES
22% 22% 22% 22% 22%

11% 11% 11% 11% 11%
23% 23% 23% 23% 23%
1 2 3 4 5
Page 27
10-8.3
Schedule 10 -8/3
Start-up (years) 3
Total years 12
Table for financial planning

Year 1 2 3 4 5 6 7 8
COSTS ($ thousands)
A. CASH INFLOW 3300 7000 7100 9457 10020 12581.67 12500 12500
1. Total financial resources 3300 7000 225 82 20 82 0 0

2. Sales revenue 0 0 6875 9375 10000 12500 12500 12500
B. CASH OUTFLOW 3300 5000 8797 8866 9472 10825 10366 11588
1. Total assets schedule 3300 5000 1583 369 91 367 -4 996

including replacements
2. Operating costs 0 0 6008 7338 7670 9000 9000 9000
3. Debt service
a. interests
suppliers' credits 0 0 240 192 144 96 48 0
bank overdrafts 0 0 135 135 135 80 40 0
bank term loans 0 0 0 0 0 0 0 0
b. repayments
suppliers' credits 0 0 600 600 600 600 600 0
bank overdrafts 0 0 0 0 600 450 450 0
bank term loans 0 0 0 0 0 0 0 0
4. Corporate tax 0 0 0 0 0 0 0 1360
5. Dividends 4% on equity 0 0 232 232 232 232 232 232
C. SURPLUS/DEFICIT 0 2000 -1698 591 549 1757 2134 912
D. CUMULATIVE CASH 0 2000 302 893 1442 3199 5332 6244

BALANCE
val Evolution of surplus

2500
2000
1500
1000
500
-500
-1000 Page 28
-1500
years
2000
1500
1000 10-8.3
500
-500
-1000
-1500
-2000 years
1 2 3 4 5 6 7 8 9 10 11 12
Page 29
10-8.3

9 10 11 12
100% 100% 100% 100%
12500 12500 12500 12500 124458
0 0 0 0 10708.33
12500 12500 12500 12500 113750
10592 10592 10592 10592 110583
0 0 0 0 11703
9000 9000 9000 9000 84015
0 0 0 0 720
0 0 0 0 525
0 0 0 0 0
0 0 0 0 3000
0 0 0 0 1500
0 0 0 0 0
1360 1360 1360 1360 6800
232 232 232 232 2320
1908 1908 1908 1908 13876
8152 10060 11968 13876 17376 13876+ 3500 SALVAGE VALUE
13876 GOES TO 10/10 CURRENT ASSETS CASH BALANCE
Page 30
10-10
Schedule 10 - 10
Start-up (years) 3
Total years 12
Projected balance sheet
Period constr. constr. start. start. start. full-cp.

Year 1 2 3 4 5 6
Production programme 0% 0% 55% 75% 80% 100%
A. ASSETS : TOTAL 3300 10300 9925 9585 9445 10788
1. CURRENT ASSETS (cumulativ total) 0 2000 1885 2845 3485 5608

a. Cash balance 0 2000 302.3 893 1442 3199
b. Current assets 0 0 1583 1952 2043 2410
2. FIXED ASSETS (ne(f\r\ amortizare) 3300 8300 7520 6740 5960 5180
initial fixed investments
replacements
preprod. capital expenditures
3. LOSSES 0 0 519 0 0 0
B. LIABILITIES (TOTAL) 3300 10300 9925 9585 9445 10788
1. CURRENT LIABILITIES 0 0 225 306 327 408
2. SHORT & MEDIUM TERM LOANS 0 4500 3900 3300 2100 1050
3. EQUITY CAPITAL 3300 5800 5800 5800 5800 5800
4. RESERVES 0 0 0 179 1218 3530
Page 31
10-10
full-cp. full-cp. full-cp. full-cp. full-cp. full-cp. TOTAL

7 8 9 10 11 12
100% 100% 100% 100% 100% 100%
12138 13266 14394 15522 16650 17778 143093
7738 8646 10554 12462 14370 16278 85873

5332 6244 8152 10060 11968 13876
2406 2403 2403 2403 2403 2403 22406
4400 4620 3840 3060 2280 1500 56700
0 0 0 0 0 0 519
12138 13266 14394 15522 16650 17778 143093
408 408 408 408 408 408 3716
0 0 0 0 0 0 14850
5800 5800 5800 5800 5800 5800 67100
5930 7058 8186 9314 10442 11570 57427
Page 32
10-12
Schedule 10 - 12
Production cost schedule Start-up (years) 3
Total years 12

Year 1 2 3 4 5 6 7 8
1. Direct materials 0 0 2888 3938 4200 5250 5250 5250

2. Direct manpower 0 0 687.5 937.5 1000 1250 1250 1250
3. Factory overheads 0 0 1600 1600 1600 1600 1600 1600
costs
FACTORY COSTS 0 0 5175 6475 6800 8100 8100 8100
4. Administrative costs 0 0 500 500 500 500 500 500

5. sales and distribution 0 0 332.5 362.5 370 400 400 400
costs
OPERATING COSTS 0 0 6008 7337.5 7670 9000 9000 9000
6. Financial costs 0 0 375 327 279 176 88 0

7. Depreciation 0 0 780 780 780 780 780 780
TOTAL PRODUCTION
COSTS 0 0 7163 8444.5 8729 9956 9868 9780
val Total production costs

12000
10000
8000
6000
4000
2000
years
0
1 2 3 4 5 6 7 8 9 10 11 12
Page 33
10-12

9 10 11 12
100% 100% 100% 100%
5250 5250 5250 5250 47775

1250 1250 1250 1250 11375
1600 1600 1600 1600 16000
8100 8100 8100 8100 75150
500 500 500 500 5000

400 400 400 400 3865
9000 9000 9000 9000 84015
0 0 0 0 1245
780 780 780 780 7800
9780 9780 9780 9780 93060
Page 34
10-13
Schedule 10 - 13
Cash-flow table and calculation of present value Construction (years) 2

Start-up (years) 3
Total years 12
for a project without outside financing

Year 1 2 3 4 5 6 7 8
A. CASH INFLOW 0 0 6875 9375 10000 12500 12500 12500
1. Sales revenue 0 0 6875 9375 10000 12500 12500 12500
B. CASH OUTFLOW 3300 5000 7366 7625 7740 9285 8996 11356
1. Total investments costs 3300 5000 1358 288 70 285 -3.666667 996
2. Operating costs 0 0 6008 7337.5 7670 9000 9000 9000
3. Corporate tax 0 0 0 0 0 0 0 1360
C. NET CASH FLOW (A-B) -3300 -5000 -491 1750 2260 3215 3504 1144
D. PRESENT VALUE -2870 -3781 -323 1001 1123 1390 1317 374
discount rate 15%
E. CUMULATIVE NET
CASH FLOW -3300 -8300 -8791 -7041 -4781 -1567 1937 3081
val CASH-FLOW
8000
6000
4000
2000
-2000
-4000
years
-6000
1 2 3 4 5 6 7 8 9 10 11 12
ROI = 0.134059
NPV= $883.26
IRR= 17.41%
NPVR= 7.82% NCFR= 134.06%
PI= 1.078205
Page 35
10-13

9 10 11 12
100% 100% 100% 100%
12500 12500 12500 12500 113750
12500 12500 12500 12500 113750
10360 10360 10360 10360 102109
0 0 0 0 11294
9000 9000 9000 9000 84015
1360 1360 1360 1360 6800
2140 2140 2140 5640 15141 5640= 2140 +3500(Salvage value)
608 529 460 1054 883 $883.26 NPV
5221 7361 9501 15141 15141 1
Page 36
10-14
Schedule 10 - 14
Cash flow table and calculation of Construction (years) 2

present value Start-up (years) 3
Total years 12
for a project with outside financing

Year 1 2 3 4 5 6 7 8
A. CASH INFLOWS 0 0 6875 9375 10000 12500 12500 12500
1. Sales revenue 0 0 6875 9375 10000 12500 12500 12500
B. CASH OUTFLOWS 3300 2500 6983 8265 9149 10226 10138 11360
1. Total investment costs 3300 2500 975 927 1479 1226 1138 1000
a. equity 3300 2500 0 0 0 0 0 0

b. replacement of cars 0 0 0 0 0 0 0 1000
c. repayments of supliers'credit 0 0 600 600 600 600 600 0
d. interest of suppliers'credits 0 0 240 192 144 96 48 0
e. repayment of bank overdraft 0 0 0 0 600 450 450 0
f. interest on bank overdraft 0 0 135 135 135 80 40 0
2. Operating costs 0 0 6008 7337.5 7670 9000 9000 9000

3. Corporate tax 0 0 0 0 0 0 0 1360
C. NET CASH FLOW (A-B) -3300 -2500 -107 1111 851 2274 2362 1140
D. PRESENT VALUE -2870 -1890 -71 635 423 983 888 373
discount rate 15%
E. CUMULATED NET
CASH FLOW -3300 -5800 -5908 -4797 -3946 -1672 690 1830
ROI= 11%
NPV= 1122.598
IRR= 19%
NPVR= 0.089486
PI= 1.089486
Page 37
10-14

9 10 11 12
100% 100% 100% 100%
12500 12500 12500 12500 113750
12500 12500 12500 12500 113750
10360 10360 10360 10360 103360
0 0 0 0 12545
0 0 0 0 5800
0 0 0 0 1000
0 0 0 0 3000
0 0 0 0 720
0 0 0 0 1500
0 0 0 0 525
9000 9000 9000 9000 84015

1360 1360 1360 1360 6800
2140 2140 2140 5640 13890 5640 = 2140+3500(Salvage Value)
608 529 460 1054 1123 NPV
3970 6110 8250 13890 13890
Page 38

Case Study: Equipment

Uploaded by

Copyright:

Available Formats

Case Study: Equipment

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Case Study: Equipment

Uploaded by

Copyright:

Available Formats

Date

1 Fixed investments 8300 Equipment

BREAK EVEN POINT

CONTRIBUTION MARGIN(Q-V)= 6000 Thou$

SECURITY MARGI (NET PROFIT MARGIN)

1-BEP%= 45.33% POSITION OF THE COMPANY TO BEP

DE ADAUGAT DE PE STICK in folderul ANDREEA BADEA

E CONCEPTION FOR BANK OVERDRAFT

c=unit cost 4.89 (π)= profit/unit 1.36

Initial fixed investments costs

Item Investment category Total cost

full full full TOTAL

Preproduction capital expenditures by category

Item Category Total

full full full TOTAL

Calculation of working capital

CAP. I Minimum requirements of current assets and liabilities

1 ACCOUNTING RECEIVABLE 30 days Production costs +

Period constr. constr. start. start. start. full-cp. full-cp. full-cp.

Factory costs 0 0 5175 6475 6800 8100 8100 8100

1.Administrative overhead 0 0 500 500 500 500 500 500

Operating costs 0 0 6007.5 7337.5 7670 9000 9000 9000

1.Financial costs 0 0 375 327 279 176 88 0

TOTAL PRODUCTION COSTS 0 0 7162.5 8444.5 8729 9956 9868 9780

suppliers' credits 240 192 144 96 48

Suppliers' credits Bank overdraft

TOTAL : 720 3,000 3,720 TOTAL : 525

full-cp. full-cp. full-cp. full-cp. TOTAL

1650 1650 1650 1650 15015

8100 8100 8100 8100 75150

500 500 500 500 5000

9000 9000 9000 9000 84015

9780 9780 9780 9780 93060

Total payments Total

Period Minimum Coeficient constr. constr. start. start. start. full-cp.

A. Accounts receivable 30 12 0 0 500.6 611.5 639.2 750

TOTAL CURRENT ASSETS 0 0 1583 1952 2043 2410

II- CURRENT LIABILITIES

A. Accounts payable 30 12 0 0 225 306 327 408

III- WORKING CAPITAL

A. Net 0 0 1358 1646 1716 2002

IV-TOT. PRODUCTION COST 0 0 7162.5 8444.5 8729 9956

TOTAL : 0 0 3687.5 3989.5 4029 4276

Required cash balance 15 24 0 0 154 166 168 178

full-cp. full-cp. full-cp. full-cp. full-cp. full-cp. TOTAL

750 750 750 750 750 750 7001

138 138 138 138 138 138 1251

2406 2403 2403 2403 2403 2403 22406

408 408 408 408 408 408 3716

1998 1994 1994 1994 1994 1994 18690

9868 9780 9780 9780 9780 9780 93060

4450 4450 4450 4450 4450 4450 40495

4188 4100 4100 4100 4100 4100 40670

175 171 171 171 171 171 1695

Total initial investments costs

Item Inventory category Total

Period constr. constr. start. start. start. full-cp. full-cp. full-cp.

1. Fixed investments costs 3000 4800 0 0 0 0 0 1000

full-cp. full-cp. full-cp. full-cp. TOTAL