Terminal Value after 2020 15168

PV of CF post 2020 1867

NPV 348.29

Cash Flow Statement

2001 2002 2003 2004 2005 2006 2007 2008
Units Sold 0 0 0 0 0 0.3*N 0.6*N N
Price Per Unit 0 0 0 0 0 225 225 225
Revenue 0 0 0 0 0 225*N*0.3 225*N*0.6 225*N
Operating Profit 0 0 0 0 0 225*N*0.3*0.2 0.2*(225*N*0.6) 0.2*(225*N)
R&D Expenditure 1100 2200 2200 2200 1320 880 660 440
Depreciation -100 -100 -100 -100 -100 -100 -100 -100
Adjustment 0 0 0 0 0 0 0 0
EBIT -1200 -2300 -2300 -2300 -1420 225*N*0.3*0.2-980 0.2*(225*N*0.6)-760 0.2*(225*N)-540
Taxes (@38%) -456 -874 -874 -874 -539.6 0.38(225*N*0.3*0.2-980) 0.38(0.2*(225*N*0.6)-760) 0.38*(0.2*(225*N)-540)
Unlevered Net Income -744 -1426 -1426 -1426 -880.4 0.62*(225*N*0.3*0.2-980) (0.2*(225*N*0.6)-760)*0.62 0.62*(0.2*(225*N)-540)
Depreciation (+) 100 100 100 100 100 100 100 100
Capital Expenditure (-) 0 -250 -350 -350 -50 -100 -100 -100
Increase in NWC (-) 0 -150 -300 -300 -200 -50 0 0
Free Cash Flow -644 -1726 -1976 -1976 -1030.4 0.62*(225*N*0.3*0.2-980)-50 (0.2*(225*N*0.6)-760)*0.62 0.62*(0.2*(225*N)-540)

Ramp up 30% -> 60%

Discount rate 6%+6%*0.84 =11.04%
FCF for 2008 27.9N - 334.8
FCF beyond 2008 increase % 2%
PV of CF between 2001-2020 111.617N-7100
CF after 2020 1867
Total NPV 111.617N-7100 + 1867
Breakeven would occur at NPV = 0
Hence breakeven N 46.88
Thus, breakeven would occur at 47 places per year