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CH 13

This document analyzes the net present value (NPV) of a 5-year project under different scenarios by varying key variables such as unit sales, price per unit, costs, and cash flows. It calculates the NPV for the base case and also runs scenarios for a 10% decrease in unit sales, price, and increase in variable and fixed costs. Finally, it analyzes worst and best case scenarios by further adjusting variables for unit sales, price, costs, and cash flows to determine the range of possible NPV outcomes for the project.

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Agung Prabowo
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65 views6 pages

CH 13

This document analyzes the net present value (NPV) of a 5-year project under different scenarios by varying key variables such as unit sales, price per unit, costs, and cash flows. It calculates the NPV for the base case and also runs scenarios for a 10% decrease in unit sales, price, and increase in variable and fixed costs. Finally, it analyzes worst and best case scenarios by further adjusting variables for unit sales, price, costs, and cash flows to determine the range of possible NPV outcomes for the project.

Uploaded by

Agung Prabowo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Study Problem

Chapter 13-7
a. b.
price/ unit 100 90
unit sold/ tahun 100000 90000
initial cost of machine 10000000
expected life 5 tahun
salvage value 0
working capital requirement 300000
depreciation method straight line
depr exp/ tahun 2000000
cash fixed cost/ tahun 1000000
variable cost / unit 20
required rate of return 10%
tax rate 34% 34%

a. Calculate the NPV


Year 0 Year 1 Year 2 Year 3
Revenue 10,000,000 10,000,000 10,000,000
less: variable cost 2,000,000 2,000,000 2,000,000
less: fixed cost 1,000,000 1,000,000 1,000,000
less: depreciation exp 2,000,000 2,000,000 2,000,000
Net operating Income 5,000,000 5,000,000 5,000,000
less: taxes 1,700,000 1,700,000 1,700,000
Net Operating Income After Tax 3,300,000 3,300,000 3,300,000
plus: depreciation exp 2,000,000 2,000,000 2,000,000
less: Increase in CAPEX 10,000,000
less: increase in NOWC 300,000
Free Cash Flow (10,300,000) 5,300,000 5,300,000 5,300,000

b. NPV if a 10% decerease in the number of unit sold


unit sold = 90%* 100000 = 90000
Year 0 Year 1 Year 2 Year 3
revenue 9,000,000 9,000,000 9,000,000
less: variable cost 1,800,000 1,800,000 1,800,000
less: fixed cost 1,000,000 1,000,000 1,000,000
less: depreciation exp 2,000,000 2,000,000 2,000,000
Net operating Income 4,200,000 4,200,000 4,200,000
less: taxes 1,428,000 1,428,000 1,428,000
Net Operating Income After Tax 2,772,000 2,772,000 2,772,000
plus: depreciation exp 2,000,000 2,000,000 2,000,000
less: Increase in CAPEX 10,000,000
less: increase in NOWC 300,000
Free Cash Flow (10,300,000) 4,772,000 4,772,000 4,772,000

c. NPV if a 10% decerease in the cost(price) per unit


Revenue 9,000,000 9,000,000 9,000,000
less: variable cost 2,000,000 2,000,000 2,000,000
less: fixed cost 1,000,000 1,000,000 1,000,000
less: depreciation exp 2,000,000 2,000,000 2,000,000
Net operating Income 4,000,000 4,000,000 4,000,000
less: taxes 1,360,000 1,360,000 1,360,000
Net Operating Income After Tax 2,640,000 2,640,000 2,640,000
plus: depreciation exp 2,000,000 2,000,000 2,000,000
less: Increase in CAPEX 10,000,000
less: increase in NOWC 300,000
Free Cash Flow (10,300,000) 4,640,000 4,640,000 4,640,000

d. NPV if a 10% increase in the variable cost per unit


variable cost/unit = 110%*20 =22
Year 0 Year 1 Year 2 Year 3
Revenue 10,000,000 10,000,000 10,000,000
less: variable cost 2,200,000 2,200,000 2,200,000
less: fixed cost 1,000,000 1,000,000 1,000,000
less: depreciation exp 2,000,000 2,000,000 2,000,000
Net operating Income 4,800,000 4,800,000 4,800,000
less: taxes 1,632,000 1,632,000 1,632,000
Net Operating Income After Tax 3,168,000 3,168,000 3,168,000
plus: depreciation exp 2,000,000 2,000,000 2,000,000
less: Increase in CAPEX 10,000,000
less: increase in NOWC 300,000
Free Cash Flow (10,300,000) 5,168,000 5,168,000 5,168,000

E. NPV if a 10% increase in the annual fixed operating cost


Year 0 Year 1 Year 2 Year 3
Revenue 10,000,000 10,000,000 10,000,000
less: variable cost 2,000,000 2,000,000 2,000,000
less: fixed cost 1,100,000 1,100,000 1,100,000
less: depreciation exp 2,000,000 2,000,000 2,000,000
Net operating Income 4,900,000 4,900,000 4,900,000
less: taxes 1,666,000 1,666,000 1,666,000
Net Operating Income After Tax 3,234,000 3,234,000 3,234,000
plus: depreciation exp 2,000,000 2,000,000 2,000,000
less: Increase in CAPEX 10,000,000
less: increase in NOWC 300,000
Free Cash Flow (10,300,000) 5,234,000 5,234,000 5,234,000

SCENARIO ANALYSIS
expected or Worst case Best case
Base Case
unit sales 100000 70000 130000
price per unit 100 90 120
variable cost per unit 20 22 18
cash fixed cost per year 1000000 1200000 900000
depreciation expense 2000000 2000000 2000000

Worst Case

Year 0 Year 1 Year 2 Year 3


Revenue 6,300,000 6,300,000 6,300,000
less: variable cost 1,540,000 1,540,000 1,540,000
less: fixed cost 1,200,000 1,200,000 1,200,000
less: depreciation exp 2,000,000 2,000,000 2,000,000
Net operating Income 1,560,000 1,560,000 1,560,000
less: taxes 530,400 530,400 530,400
Net Operating Income After Tax 1,029,600 1,029,600 1,029,600
plus: depreciation exp 2,000,000 2,000,000 2,000,000
less: Increase in CAPEX 10,000,000
less: increase in NOWC 300,000
Free Cash Flow (10,300,000) 3,029,600 3,029,600 3,029,600

Best Case

Year 0 Year 1 Year 2 Year 3


Revenue 15,600,000 15,600,000 15,600,000
less: variable cost 2,340,000 2,340,000 2,340,000
less: fixed cost 900,000 900,000 900,000
less: depreciation exp 2,000,000 2,000,000 2,000,000
Net operating Income 10,360,000 10,360,000 10,360,000
less: taxes 3,522,400 3,522,400 3,522,400
Net Operating Income After Tax 6,837,600 6,837,600 6,837,600
plus: depreciation exp 2,000,000 2,000,000 2,000,000
less: Increase in CAPEX 10,000,000
less: increase in NOWC 300,000
Free Cash Flow (10,300,000) 8,837,600 8,837,600 8,837,600
d. e.

1100000
22

Year 4 Year 5
10,000,000 10,000,000 pv dari PMT 5300000 selama 5 tahun
2,000,000 2,000,000 5300000*((1-(1+10%)^-5)/10%) 20,091,170
1,000,000 1,000,000 pv dari fv 300000 selama 5 tahun
2,000,000 2,000,000 300000*(1+10%)^-5 186,276
5,000,000 5,000,000 20,277,446
1,700,000 1,700,000 NPV= initial oultay + present value cash inflow
3,300,000 3,300,000 9,977,446
2,000,000 2,000,000

(300,000)
5,300,000 5,600,000

Year 4 Year 5
9,000,000 9,000,000 pv dari PMT 4772000 selama 5 tahun
1,800,000 1,800,000 4772000*((1-(1+10%)^-5)/10%) 18,089,634
1,000,000 1,000,000 pv dari fv 300000 selama 5 tahun
2,000,000 2,000,000 300000*(1+10%)^-5 186,276
4,200,000 4,200,000 18,275,911
1,428,000 1,428,000 NPV= initial oultay + present value cash inflow
2,772,000 2,772,000 7,975,911
2,000,000 2,000,000

(300,000)
4,772,000 5,072,000

9,000,000 9,000,000 pv dari PMT 4640000 selama 5 tahun


2,000,000 2,000,000 4640000*((1-(1+10%)^-5)/10%) 17,589,251
1,000,000 1,000,000 pv dari fv 300000 selama 5 tahun
2,000,000 2,000,000 300000*(1+10%)^-5 186,276
4,000,000 4,000,000 17,775,527
1,360,000 1,360,000 NPV= initial oultay + present value cash inflow
2,640,000 2,640,000 7,475,527
2,000,000 2,000,000

(300,000)
4,640,000 4,940,000

Year 4 Year 5 pv dari PMT 5160000 selama 5 tahun


10,000,000 10,000,000 5160000*((1-(1+10%)^-5)/10%) 19,560,460
2,200,000 2,200,000 pv dari fv 300000 selama 5 tahun
1,000,000 1,000,000 300000*(1+10%)^-5 186,276
2,000,000 2,000,000 19,746,736
4,800,000 4,800,000 NPV= initial oultay + present value cash inflow
1,632,000 1,632,000 9,446,736
3,168,000 3,168,000
2,000,000 2,000,000

(300,000)
5,168,000 5,468,000

Year 4 Year 5 pv dari PMT 5234000 selama 5 tahun


10,000,000 10,000,000 5234000*((1-(1+10%)^-5)/10%) 19,840,978
2,000,000 2,000,000 pv dari fv 300000 selama 5 tahun
1,100,000 1,100,000 300000*(1+10%)^-5 186,276
2,000,000 2,000,000 20,027,254
4,900,000 4,900,000 NPV= initial oultay + present value cash inflow
1,666,000 1,666,000 9,727,254
3,234,000 3,234,000
2,000,000 2,000,000
(300,000)
5,234,000 5,534,000

Year 4 Year 5 pv dari PMT 3029600 selama 5 tahun


6,300,000 6,300,000 3029600*((1-(1+10%)^-5)/10%) 11,484,568
1,540,000 1,540,000 pv dari fv 300000 selama 5 tahun
1,200,000 1,200,000 300000*(1+10%)^-5 186,276
2,000,000 2,000,000 11,670,844
1,560,000 1,560,000 NPV= initial oultay + present value cash inflow
530,400 530,400 1,370,844
1,029,600 1,029,600
2,000,000 2,000,000

(300,000)
3,029,600 3,329,600

Year 4 Year 5 pv dari PMT 8837600 selama 5 tahun


15,600,000 15,600,000 8837600*((1-(1+10%)^-5)/10%) 33,501,457
2,340,000 2,340,000 pv dari fv 300000 selama 5 tahun
900,000 900,000 300000*(1+10%)^-5 186,276
2,000,000 2,000,000 33,687,734
10,360,000 10,360,000 NPV= initial oultay + present value cash inflow
3,522,400 3,522,400 23,387,734
6,837,600 6,837,600
2,000,000 2,000,000

(300,000)
8,837,600 9,137,600

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