Project Finance and

Infrastructure
Case study analysis

Submitted to: Dr. Debaditiya Mohanty

Submitted by: Abhisek Sarkar

Arushi Bhatia

Harsh Jain

Bhargav Balsing

Shouvik Biswas

Sahil Jain
New heritage doll company which has ventured into doll production which has sought to extend its
brand in order to broaden its market in order to broaden There are basically two projects from
which the company can choose either which it think is more feasible

Design your doll project investment is higher than match my doll project investment by 3291000
dollars . Now ,if the company compares on the basis of total cost , then match my doll is more
feasible than design your doll as it involves high amount of investment .

NET PRESENT VALUE METHOD

MATCH MY DOLL

TERMINAL VALUE ON 2020 IS 530$

Operating
profit PVIF Present value

2011 583 0.9174 534.8442

2012 994 0.8417 836.6498
2013 1277 0.7722 986.0994
2014 1392 0.7084 986.0928
2015 1503 0.6499 976.7997
2016 1623 0.5963 967.7949
2017 1753 0.547 958.891
2018 1893 0.5019 950.0967
2019 2045 0.4604 941.518
2020 2209+ 530 0.4224 1156.95
TOTAL 9295.7365

NPV = 9295.7365 - 3520 = 5775.75

NPV is positive meaning the project is feasible

DESIGN MY DOLL

TERMINAL VALUE ON 2020 IS 1105$

 Operating
profit PVIF Present value

2011 0 0.9174 0
2012 550 0.8417 462.935
2013 1794 0.7722 1385.3268
2014 2724 0.7084 1929.6816
2015 2779 0.6499 1806.0721
2016 2946 0.5963 1756.6998
2017 3123 0.547 1708.281
2018 3310 0.5019 1661.289
2019 3509 0.4604 1615.5436
2020 4824 0.4224 1156.95
TOTAL 13482.7789

Net present value of design my doll is higher , hence it is a more feasible project compared to that of
make my doll .

INTERNAL RATE OF RETURN

Considering rate of 7 %

PVIF,7% PV
2010 -1250 1 -1250
2011 583 0.9345 544.8135
2012 994 0.8734 868.1596
2013 1277 0.8162 1042.287
2014 1392 0.7628 1061.818
2015 1503 0.7129 1071.489
2016 1623 0.6663 1081.405
2017 1753 0.6227 1091.593
2018 1893 0.582 1101.726
2019 2045 0.5439 1112.276
2020 2739 0.5083 1392.234
TOTAL 9117.8

IRR = 7% ( 9117.8 / 9117.8 6707.677 ) * 12% - 7% = 0.503 OR 5.03%

DESIGN MY DOLL

PVIF,7% PV
2010 -1201 1 -1201
2011 0 0.9345 0
2012 550 0.8734 480.37
2013 1794 0.8162 1464.263
2014 2724 0.7628 2077.867
2015 2779 0.7129 1981.149
2016 2946 0.6663 1962.92
2017 3123 0.6227 1944.692
2018 3310 0.582 1926.42
2019 3509 0.5439 1908.545
2020 3719 0.5083 1890.368
TOTAL 14435.59

IRR = 7% ( 14435.59 / 14435.59 10526.15 ) * 12% - 7% = 0.512 OR 5.12%

IRR of the project design my doll is marginally better than making my doll project .

Hence , design my doll is better project than buy my doll as it has better NPV , IRR ,