Documente Academic
Documente Profesional
Documente Cultură
0
0
10,000,000
10,000,000
$
$
$
$
$
$
$
$
$
$
$
$
$
5,000
1,000
5,000,000
500,000.00
918,000
50,000
1,000,000
36,000
2,000,000
496,000
(198,400)
297,600
2,000,000
$
$
$
$
$
$
$
$
$
$
$
$
$
5,000
1,030
5,150,000
515,000
945,540
51,500
1,030,000
37,080
3,200,000
(629,120)
251,648
(377,472)
3,200,000
$
$
$
$
$
$
$
$
$
$
$
$
$
5,000
1,061
5,304,500
530,450
973,906
53,045
1,060,900
38,192
1,900,000
748,006
(299,203)
448,804
1,900,000
2,297,600
2,822,528
2,348,804
4.09
Assumption: Incase of NPV calculation it is to assume that tax payments and tax savings occur at
there is an expected loss of ($ 629120) and we assume that this loss will generate tax saving in the
Q.8 NPV
Free CF
PV of CF
(10,000,000)
2,297,600
2,822,528
2,348,804
(10,000,000)
2,088,727
2,332,668
1,764,691
NPV
Year
590,701
Q.9 IRR
IRR
12.08%
# of Procedures
3,500
4,000
4,500
5,000
5,500
6,000
6,500
New NPV
(3,011,639)
(1,810,859)
400000000%
(610,079)
200000000%
590,701
1,791,481
2,992,261
4,193,041
Average Revenue
700
800
900
1,000
1,100
1,200
Change in # of Procedures
600000000%
0%
-30%
-200000000%
-400000000%
New NPV
-20%
-10%
0%
10%
20%
30%
New NPV
(3,011,639)
600000000%
(1,810,859)
400000000%
(690,079)
200000000%
590,701
1,791,481
0%
-30%
-200000000%
2,992,261
-400000000%
-20%
-10%
New NPV
0%
10%
20%
30%
400000000%
200000000%
0%
-30%
-200000000%
-400000000%
30%
1,300 $
4,193,041
140000000%
-20%
-10%
0%
10%
20%
30%
New NPV
120000000%
100000000%
80000000%
60000000%
40000000%
20000000%
0%
-30%
-20000000%
-20%
-10%
New NPV
0%
10%
20%
30
Salvage Value
New NPV
140000000%
120000000%
$
$
$
$
$
$
$
-30%
-20%
-10%
0%
10%
20%
30%
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
6,000,000
6,500,000
$
$
$
$
$
$
$
31,872
218,148
404,425
590,701
776,978
963,254
1,149,530
100000000%
80000000%
60000000%
40000000%
20000000%
0%
-30%
-20000000%
-20%
-10%
New NPV
0%
Prob.
0.25
0.50
0.25
# Procedures
3,750
5,000
6,250
Avg. Revenue
800
1,000
1,200
Sal. Value
4,000,000
5,000,000
6,000,000
Year
1. Land
2.Build/Equip
--# of Procedures
--Avg. Revenue/Procedure
3. Revenues
4. Lost Revenues
5. Labor costs (Salary)
6. Utilities
7. Supplies
8. Overhead
9. Depreciation
10. EBT
11. Taxes @40% saving
12. Net Income
13. Depreciation
14. Salvage Value
15. Free CF
PV of CF
0
$0
10,000,000
3,750
800
3,000,000
500,000
918,000
50,000
1,000,000
36,000
2,000,000
(1,504,000)
601,600
(902,400)
2,000,000
3,750
824
3,090,000
515,000
945,540
51,500
1,030,000
37,080
3,200,000
(2,689,120)
1,075,648
(1,613,472)
3,200,000
3,750
849
3,182,700
530,450
973,906
53,045
1,060,900
38,192
1,900,000
(1,373,794)
549,517
(824,276)
1,900,000
(10,000,000)
1,097,600
1,586,528
1,075,724
(10,000,000)
997,818
1,311,180
808,207
10%
20%
30
$
$
$
$
$
$
$
$
$
$
$
$
$
5,000
1,093
5,463,635
546,364
1,003,123
54,636
1,092,727
39,338
1,200,000
1,527,447
(610,979)
916,468
1,200,000
2,116,468
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
5,000
1,126
5,627,544
562,754
1,033,217
56,275
1,125,509
40,518
1,100,000
1,709,270
(683,708)
1,025,562
1,100,000
2,640,000
4,765,562
hat tax payments and tax savings occur at the same period . Hence In year #2
that this loss will generate tax saving in the same year.
2,116,468
4,765,562
1,445,576
2,959,039
in # of Procedures
-10%
0%
10%
20%
30%
e in Avg. Revenue
10%
0%
10%
20%
30%
10%
0%
10%
20%
30%
e in Salvage Value
10%
V
0%
10%
20%
30%
e in Salvage Value
10%
V
0%
10%
20%
30%
NPV
-1,462,913
295,351
1,741,789
3,750
874
3,278,181
546,364
1,003,123
54,636
1,092,727
39,338
1,200,000
(658,007)
263,203
(394,804)
1,200,000
805,196
3,750
900
3,376,526
562,754
1,033,217
56,275
1,125,509
40,518
1,100,000
(541,748)
216,699
(325,049)
1,100,000
2,040,000
774,951
549,959
481,184
Now Year 0
0
10,000,000
6 Relevant workings
$
$
$
$
$
10,000,000
20.0%
32.0%
5000
$
$
1,000
5,000,000
$
$
$
$
$
$
$
$
$
918,000
50,000
36,000
500,000
1,000,000
2,000,000
4,504,000
$
$
$
$
$
$
$
3.0%
945,540
51,500
37,080
515,000
1,030,000
3,200,000
5,779,120
496,000
40.00%
(198,400)
297,600
2,000,000
2,297,600
$
$
$
$
$
$
$
$
Year 1
(629,120)
40.00%
251,648
(377,472)
3,200,000
2,822,528
Year 2
500,000
250,000
150,000
$
$
$
$
$
5000
3.0%
1,030
5,150,000
Total Amount
a. Sunk cost
Market Research & feasibility study $
b. Irrevant Costs
I. Allocated admin overhead cost
$
II. Land purchased 5 year back
$
7 Free Cash Flow
Operational Cash inflow
Add : Post tax salvage value
Total Operational Cash Flow
Less :
Change in Working Capital
Capital Expenditures per annum
Inflow & Outflow related to Debts
Free Cash Flow
PV Factor @ 10% 5yrs
Discounted Free Cashflow
End of Year 2
5 years
3 Operating expenses
Increse in Operating costs
Salary
Utility bills
Overhead
Opportunity Cost (Loss of Revenue)
Disposable Medical Supplies
Depreciation expenses
Total Operating Expenses
Operating Profit
Pre tax operating Profit (EBIT)
Income Tax Rate
Income tax effect
4 After tax operating profit( EBT)
Add: Depreciation
5 Net Cash flow from operations
End of Year 1
(10,000,000) $
1
(10,000,000) $
5,000,000
600,000
4,400,000
1,760,000
2,640,000
50,000
-
2,297,600
2,297,600
$0
$0
$0
2,297,600
0.9090909091
2,088,727
###
###
$
$
$
$
2,822,528
###
2,822,528
$0
$0
$0
2,822,528
0.826446281
2,332,668
Year
Total
10 NPV
Discounted Outflow
Discounted Cash Inflow
$
PV Factor @
NPV [ Discounted Inflow - Discounted O $
Outflow
0 $
(10,000,000)
1
2
3
4
5
$
(10,000,000)
$10,000,000
10,590,701
10.0%
590,701
11 IRR
2,088,727
-30%
-20%
-10%
0%
10%
20%
30%
NPV
$
$
$
$
$
$
$
(3,011,639)
(1,810,859)
(610,079)
590,701
1,791,481
2,992,261
4,193,041
-30%
-20%
-10%
0%
10%
20%
30%
NPV
$
$
$
$
$
$
$
(3,011,639)
(1,810,859)
(690,079)
590,701
1,791,481
2,992,261
4,193,041
12.08%
12 Sensetivity Analysis
a. No of Procedures
% Change
3,500
4,000
4500
5,000
5,500
6,000
6,500
b. Change In Average Revenue
% Change
700
800
900
1000
1100
1200
1300
c.
$
$
$
$
$
$
$
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
6,000,000
6,500,000
NPV
-30%
-20%
-10%
0%
10%
20%
30%
$
$
$
$
$
$
$
31,872
218,148
404,425
590,701
776,978
963,254
1,149,530
Inflows p.a
$
$
$
$
$
$
2,297,600
2,822,528
2,348,804
2,116,468
4,765,562
14,350,962
2,332,668
End of Year 3
End of Year 4
19.0%
End of Year 5
$
$
2,640,000
12.0%
11.0%
$
$
5000
3.0%
1,061 $
5,304,500 $
5000
3.0%
1,093 $
5,463,635 $
5000
3.0%
1,126
5,627,544
$
$
$
$
$
$
$
3.0%
973,906
53,045
38,192
530,450
1,060,900
1,900,000
4,556,494
3.0%
1,003,123
54,636
39,338
546,364
1,092,727
1,200,000
3,936,188
3.0%
1,033,217
56,275
40,518
562,754
1,125,509
1,100,000
3,918,274
$
$
$
$
$
748,006
40.00%
(299,203)
448,804
1,900,000
2,348,804
$
$
$
$
$
$
$
$
$
$
$
$
Year 3
$
$
$
$
$
$
$
$
$
$
$
$
Year 4
50,000
-
2,348,804
2,348,804
$0
$0
$0
2,348,804
0.7513148009
1,764,691
1,527,447
40.00%
(610,979)
916,468
1,200,000
2,116,468
$
$
$
$
$
$
$
$
$
$
$
1,709,270
40.00%
(683,708)
1,025,562
1,100,000
4,765,562
Year 5
### $
### $
2,116,468
###
2,116,468
$0
$0
$0
2,116,468
0.6830134554
1,445,576
$
$
$
$
$
End of Year 6
50,000
-
2,125,562
2,640,000
4,765,562
$0
$0
$0
4,765,562
0.6209213231
2,959,039
6.0%
Cumulative Inflows
$
$
$
$
$
2,297,600
5,120,128
7,468,932
9,585,400
14,350,962 Payback Period =
(in Years)
1,764,691
1,445,576
4.09
2,959,039