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WACC and NPV Analysis for CCGT Plant

This document calculates the weighted average cost of capital (WACC) as 5.74% for an investment project. It then provides a discounted cash flow analysis of the project over a 10 year period, showing annual cash inflows and a terminal value, resulting in a positive net present value of $748,368,000. Therefore, this is a positive NPV project that is considered attractive for investment.

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Vikas Tiwari
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471 views3 pages

WACC and NPV Analysis for CCGT Plant

This document calculates the weighted average cost of capital (WACC) as 5.74% for an investment project. It then provides a discounted cash flow analysis of the project over a 10 year period, showing annual cash inflows and a terminal value, resulting in a positive net present value of $748,368,000. Therefore, this is a positive NPV project that is considered attractive for investment.

Uploaded by

Vikas Tiwari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

WACC Calculation

D/V
Kd
t
E/V
Rf
(Rm-Rf)
beta
Ke
WACC
Inflation rate

79%
7.75%
38%
21%
5.66%
6%
0.60
9.26%
5.74%
2%

Exhibit (3a) as per 31/3/99


Exhibit 5
Exhibit 5
Exhibit (3a) as per 31/3/99
Exhibit 6a (10 yr US treasury bill)
Exhibit 6a

in ($000)
Year 1
Year 2
Year 3
Capex
$
250,000 $
250,000
Cash Inflows
$
60,102
Terminal Value
$
1,305,679
NPV
$
748,368
*Terminal value was calculated using annuity of 30 years, assuming plant life of 30 years as plant is d
*Capex of $500mn is given in two years, we assumed it $250mn every year.

So this is a positive NPV project a

Annual Cash flow calculations for


CCGT plant ($000)
Gross Profit
70,057
Exhibit 5
Tax (@38%)
-26621.66
EBIAT
43,435.34
Depriciation
16667
Exhibit 5
Capex
0
Assumed
Delta NWC
0
Assumed
FCFF
60,102.34

Year 4
$

61,304

Year 5
$

62,530 $

Year 6
63,781 $

of 30 years as plant is depreciable for 30 years.


ear.

positive NPV project and hence attractive.

Year 7
65,057 $

Year 8
66,358 $

Year 9
67,685

Year 10
$

69,039

1234795

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