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    CAPEX Exercise

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    vania gabriella
    The document provides financial projections for a five year project with an initial investment of Rp. 200,000. It includes sales, costs, expenses, profits, cash flows and calculations to determine if the project is profitable and feasible based on net present value, internal rate of return and payback period.

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    CAPEX Exercise

    Uploaded by

    vania gabriella
    38 views5 pages
    The document provides financial projections for a five year project with an initial investment of Rp. 200,000. It includes sales, costs, expenses, profits, cash flows and calculations to determine if the project is profitable and feasible based on net present value, internal rate of return and payback period.

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    Capital Ependiture Finance

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    The document provides financial projections for a five year project with an initial investment of Rp. 200,000. It includes sales, costs, expenses, profits, cash flows and calculations to determine if the project is profitable and feasible based on net present value, internal rate of return and payback period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    38 views5 pages

    CAPEX Exercise

    Uploaded by

    vania gabriella
    The document provides financial projections for a five year project with an initial investment of Rp. 200,000. It includes sales, costs, expenses, profits, cash flows and calculations to determine if the project is profitable and feasible based on net present value, internal rate of return and payback period.

    Copyright:

    © All Rights Reserved
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    You are on page 1of 5

    REKAYADA ALCATEL

    Total Cash Outlay/Investment = Rp. 200,000.00


    Estimated Life of the Project = 5 years
    Residual Value of the Project in the fifth year is Zero
    Sales projection for five years are Rp. 225,000.00/p.a.
    Cost of Goods Sold is 60% out of SALES
    Operating Expenses:
    The First year Rp. 50,000.00
    The Second year Rp. 55,000.00
    The Third year Rp. 60,000.00
    The Fourth year Rp. 70,000.00
    The Fifth year Rp. 70,000.00

    Project will finance by:


    1. Equity, expected return (ROE) is 18%.
    2. Bank, interest rate is 13% per annum.
    3. Bank and Equity, composition as follows:
    a. Financing from Bank 60%
    b. Financing from Equity 40%
    c. Cost of Capital = ???
    WACC= wdkd x (1 - t) + wcks

    Note: Is this project profitable and feasible?


    REKAYADA ALCATEL
    Profit & Loss Account
    BANK’S LOAN & EQUITY

    ACTIVITIES 1 2 3 4 5
    SALES 225,000 225,000 225,000 225,000 225,000
    COGS 135,000 135,000 135,000 135,000 135,000
    GROSS PROFIT 90,000 90,000 90,000 90,000 90,000
    Operating Cost 50,000 55,000 60,000 70,000 70,000
    EBIT - (5,000) (10,000) (20,000) (20,000)
    Interest 13% - (650) (1,300) (2,600) (2,600)
    EBT - (4,350) (8,700) (17,400) (17,400)
    TAXES 35% - (1,523) (3,045) (6,090) (6,090)
    EAT - (2,828) (5,655) (11,310) (11,310)
    Free Cash Flow
    EAT - (2,828) (5,655) (11,310) (11,310)
    Depreciation 40,000 40,000 40,000 40,000 40,000
    I(1–t) - (423) (845) (1,690) (1,690)
    Total FCF 40,000 36,750 33,500 27,000 27,000
    WACC 1.12 1.26 1.42 1.59 1.78
    Net Cash Flow 35,628 29,156 23,673 16,995 15,137
    Total Cash 200,000
    Out/Investasi
    Total Cash Inflow 120,589
    NPV (79,411)
    PT. PEA Trans Corporation
    Finance project of PT. PEA is looking for an advisor from Consultant Office to
    make sure whether or not the project of its company is feasible. You as a member
    of consultant group need to help him, to make sure the final calculation of its
    project is accurate. Blank form of Profit and Loss projection for five years shown
    below. PT. PEA is going to invest $28,000.00, Cost of capital (WACC) is 12
    percent. There will be residual value $5,000 at the end of the fifth year.
    Year 1 2 3 4 5 5
    Sales 30,000 35.000 40,000 45,000 42,500 R.Value
    COGS 18,000 21,000 24,000 27,000 25,500
    Gross profit 12,000 14,000 16,000 18,000 17,000
    Operating Costs 3,600 4200 4800 6750 6375
    Depreciation 4,600 4,600 4,600 4,600 4,600
    EBIT 3,800 5200 6600 6650 6025
    Interest 1,000 1000 1000 1000 1000
    EBT 2,800 4200 5600 5650 5025
    Income Tax .35 980 1470 1960 1577,5 1758,75
    Net Income 1,820 2730 3640 3672,5 3266,25
    FCF
    Net Income 1,820 2730 3640 3672,5 3266,25
    Interest ( 1-t ) 650 650 650 650 650
    Depreciation 4,600 4,600 4,600 4,600 4,600
    Residual Value 5,000
    Total FCF 7070 7980 8890 8922,5 8516,2 5000
    5
    WACC, 12% 12% 12% 12% 12% 12% 12%
    Net Cash Flow 6312,5 6361,6 6327,7 5670,41 4832,35 2837,13
    1 3
    Total Cash Out (28000)
    Total Cash Inflow 32341,73
    NPV 4341,73

    Note:
    - COGS 60 percent of Sales; Operating cost 12 percent for the first, second
    and third year, Then the fourth and the fifth increase to 15 percent out of
    Sales; Numbers of Depreciation and Interest rate are constant.
    - Are you going to take the project?
    1) Calculate Net Present Value
    2) Internal Rate of Return
    3) Payback Period
    2. Let’s see Internal Rate of Return, how many percent?
    Year Free Cash Flow 12% 15% 17% 19%
    1. (28,000)
    2. 7,070 6,312 6,147 6,042 5,941
    3. 7,980 6,361 6,034 5,829 5,635
    4. 8,890 6,327 5,845 5,550 5,275
    5. 8,923 5,670 5,101 4,761 4,449
    6. 13,516 7,669 6,719 6,164 5,663
    Total Cash inflow 32,341 29,848 28,349 26,965
    Total Cash out 28,000 28,000 28,000 28,000
    NPV + 4341 1848 349 (1034)

    Interpolasi
    Cash Flow Cash Flow
    WACC 12% 32,341 WACC 28,000
    Total Investment 28,000 WACC 28,000
    4,342

    IRR = {(Cfl positive/Cfl Negative ) x (R2 – R1) + R1}


    IRR = 17,49%
    Let’s see Cash flow position of IRR
    Fcf 19% Fcf
    Year Free Cash Flow
    12% 17,49%
    1. 7,070 6,312 5,941 6,017
    2. 7,980 6,361 5,635 5,780
    3. 8,890 6,327 5,275 5,481
    4. 8,923 5,670 4,449 4,682
    5. 13,516 7,669 5,663 6,037
    Total Cash inflow 32,341 26,965 28,000
    Total Cash out 28,000 28,000 28,000
    NPV + 4,341 --000--
    (1034)

    3. Payback period

    Project 0 1 2 3 4 5

    Cash Out – 28,000 7070 7980 8890 8922,5 13516,25


    Cumulative -20930 -12950 -4060 -4862,5 18378,7
    Cash flow - 28,000

    Payback = year 64 full ecovery turnover / net CFL


    = 3 + 4060/ 8922,5 = 3,455 years

    ------------------------------------Good Luck Buddy-----------------------------

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