profitability criteria exercices serie2.xlsx

8/9/2019 PROFITABILITY CRITERIA EXERCICES SERIE2.xlsx

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Patterns of CIRR 0.15

Year Project A0 (15,000)

==>> Bigger CF early, slope less steep 1 ,000!ess "i#e $or cas% &o's to s%ri (ta e i terest o*t) + ,000==>> -#aller CF early, slope #ore steep 5,000

Cas% &o's #ore 'eig%t to'ar/ e /, P s#aller 2 1,0003ore ti#e $or larger cas% &o's to s%ri "otal

Also4 !arger isco* t Rate, P -#aller IRR P Project A0 65,000.00

0.05 6 ,+0 .110.1 61, 70.88

0.15 6 5+.7+0.+ (6780.80)


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ash Flows

Project B (15,000)

1,0005,000,000,000

P Project B65,000.006+,+5+.17

61 . +(61, 0.58)(6 , 2.+0)

0 0.05 0.1 0.15 0.+ 0.+5

(62,000.00)

(6 ,000.00)

(6+,000.00)

(61,000.00)

60.00

61,000.00

6+,000.00

6 ,000.00

62,000.00

65,000.00

6 ,000.00

PP


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Cost 91 50000.00 Perio/s Years 0

epr 3et%o/4 #et%o/e /:a##ortisse -! straig%t li e 1

sal;age 0 +epre < 9++5000.00

it -ales per year 7,000 2Price per * it 2.+5 5

C per * it4 ;ar cost par * it? +0.50FC per year4 @ cost 750000.00

"a Rate 0. 5

IRR ta* /e re ta ilit? 0.11

C Perio/sCFD4 Base Case 1+.50 0

ecrease i * it sales 500 1CFD4 Base Case 9 500 its -ales +

25


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CFD C Cap -pe /i g "otal Cas% Flo'1+.50 91 50000.001+.50 91 50000.00

1+.50 91 50000.001+.50 91 50000.001+.50 91 50000.001+.50 91 50000.00

1+.50 91 50000.00

P 9 Base 60.00

CFD C Cap -pe /i g "otal Cas% Flo'

P 4 Base Case 9 500 its -alesiEere ce /*e to /rop o$ 500 * its.

rop i al*e A//e/ per o e * it o$ sales /rop -e siti;ity

ot as e/ $or i pro le#4I crease i * it sales

CFD4 Base Case its -ales

P 4 Base Case its -alesiEere ce /*e to i crease o$ * its.

rop i al*e A//e/ per o e * it o$ sales /rop -e siti;ity


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C 4 et or i g Capital -%ort9ter# cas% ee

CFD4 Cas% Flo' Dperati g = ( Re;e *eG

= +

-! epreciatio < pe se $or o e Yea

R< <


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/e/ y @r# to 'or 'it%4 $o / propre

(19ta e) ta eG epreciatio )

Depreciation - Taxes

r = (Cost9-al;age)HYears =


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"a Rate "a le

I co#e Fro# I co#e "o "a Rate 9 50,000 15.00 50,001 75,000 +5.00 75,001 100,000 2.00

100,001 5,000 8.00

5,001 10,000,000 2.00

10,000,001 15,000,000 5.00 15,000,001 1 , , .00 1 , , 2 5.00

A;erage "a

3argi al "a Ra

* In inance it is the !arginal tax rate that is "sed in cash flow


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AssumptionsTaxable Income 300,000.00

Taxable Income = $300,000.00

Calculate tax for entire year

$50,000*15.00% 7,500.00($75,000-$50,000 *!5.00% ",!50.00($100,000-$75,000 *3#.00% ,500.00

($300,000-$100,000 *3 .00% 7 ,000.00100,!50.00

A&e'a e Tax )ate = 0.33#17a' inal Tax )ate +o' next olla' = 0.3 000

ates = total ta esHta a le i co#e

es = rate *se/ o t%e e t ta a le 6

anal#sis$ This is beca"se if #o" are considering a new pro%ect& an# new cash flows will be taxed atthe !arginal rate


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Pessimistic

Ra ge o$ al*es H9 10.0 10.00

Cost 1 50000.00

Yearsepr 3et%o/ -!-al;age 0

epre <it -ales per year

Price per * itC per * it

FC per year "a Rate 0. 5IRR 0.11

C

CFD4 Base CaseP

Optimistic

Pessimistic

J A3


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Base

Cost 1 50000.00

Yearsepr 3et%o/ ++5000-al;age 0

epre <it -ales per year 7,000

Price per * it 2.+5C per * it +0.50

FC per year 750000.00 "a Rate 0. 5IRR 0.11

C

CFD4 Base Case 1+.50P +10+75.+2

it sales a / Price i crease y

it sales a / Price /ecrease

C 4 et or i g Capital -%oCFD4 Cas% Flo' Dperati

-! epreciatio < p


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Optimistic

Cost 1 50000.00

Yearsepr 3et%o/ ++5000-al;age 0

epre <it -ales per year 7 , 00

Price per * it 6 7.C per * it 6 1 .25 1 .25

FC per year 6 75,000.00 750000 "a Rate 0. 5 22 50IRR 0.11 1

C +10+75

CFD4 Base CaseP

re;e *e=

10 K Costs /ecrease y 10

10 K Costs i crease y 10

t9ter# cas% ee/e/ y @r# to 'or 'it%4 $o / propreg = ( Re;e *eG (19ta e) ta eG epreciatio )

se $or o e Year = (Cost9-al;age)HYears =


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1 6 , 1+.50+ 6 , 1+.50

6 , 1+.502 6 , 1+.50

22 +50 0, 17.50 5 6 , 1+.50 6 , 1+.50

P 6+10,+75.+2


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3argi al "a Rate 0. 2Cost D$ Asset 1100000.00Property I /*strial


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< / Boo al*e82+ 10.00

7 2+0.002 10 0.00

2 20.006+25,210.006127,+80.00

628,0 0.0060.00

"a Rate i M1

"a Rate i M1


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-tart Price per * it 80.00 Pro Forma Information

Price ecrease A$ter Year 2 Year itsPrice a$ter year 2 0.00 0

1 1 ,000

Year Projecte/ it -ales + 15,0001 1 ,000 1 ,000+ 15,000 2 1 ,500

1 ,000 5 1 ,0002 1 ,500 15,0005 1 ,000 7 12,000

15,000 1 ,0007 12,000

1 ,000

C eac% year (;aria le cost) 55.00Cost I creases A$ter Year 5Cost a$ter year 5 0.00

"otal Fi e/ Cost


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it Price "otal -ales C H * it "otal C FC

6 80.00 6 1,170,000.00 6 55.00 6 715,000.00 6 5,000

6 80.00 6 1, 50,000.00 6 55.00 6 +5,000.00 6 5,0006 80.00 6 1,220,000.00 6 55.00 6 0,000.00 6 5,0006 80.00 6 1,2 5,000.00 6 55.00 6 807,500.00 6 5,0006 0.00 6 1,+ 0,000.00 6 55.00 6 0,000.00 6 5,0006 0.00 6 1,+00,000.00 6 0.00 6 800,000.00 6 5,0006 0.00 6 1,1+0,000.00 6 0.00 6 20,000.00 6 5,0006 0.00 6 1,020,000.00 6 0.00 6 7 0,000.00 6 5,000

"otal3ACR- /o'


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epr


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"otal C ee/e/ Cas% Flo's ==> DCF CF $or C Cap -pe /i g615,000

6 18 ,800.00 Cas% Flo's ==>

6 ++8,500.00 Cas% Flo's ==> 6 +22, 00.00 Cas% Flo's ==> 6 +5+,250.00 Cas% Flo's ==> 6 +17, 00.00 Cas% Flo's ==> 6 +02,000.00 Cas% Flo's ==> 6 180,200.00 Cas% Flo's ==> 6 17 , 00.00 Cas% Flo's ==>


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Perio/ Cas% Flo' For P01

+

25

7

PIRR

Pay ac

C*#*lati;e CF $orPay ac


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J A3<

YEAR ROJECT ROJECT RNPV( !" 557. + 271. 5

NPV(##!" 0 .+5 08.07 11NPV($%!" 0.00 100. 8 +0


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YEAR PROJECT A PROJECT B YEAR% &$%%% &$%%% NPV( !"# '%% $%%% NPV(##!"$ $'%% $ NPV($%!"

IRR $%! $ !

!0

100

+00

00

200

500

00

Pr

NPV A >


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PROJECT A PROJECT B R557. + 271. 5

0 .+5 08.07 11

0.00 100. 8 +0

##! $%!

)ect A Pro)ect B

PV B NPV A < NPV B

profitability criteria exercices serie2.xlsx

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