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오성엽, 안재형, 유환철. For new PDS Prototype750,000USD Market study200,000USD Price($/ea)360 VC($/ea)155 FC4.7M/year Equipment21.5M Taxes0.35 Year MACRS percentag.

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Presentation on theme: "오성엽, 안재형, 유환철. For new PDS Prototype750,000USD Market study200,000USD Price($/ea)360 VC($/ea)155 FC4.7M/year Equipment21.5M Taxes0.35 Year MACRS percentag."— Presentation transcript:

1 오성엽, 안재형, 유환철

2 For new PDS Prototype750,000USD Market study200,000USD Price($/ea)360 VC($/ea)155 FC4.7M/year Equipment21.5M Taxes0.35 Year MACRS percentag e DepreciationEnding book value 114.29.1429x$21500000307235018427650 224.49.2449x$21500000526535013162300 317.49.1749x$2150000037603509401950 412.49.1249x$2150000026853506716600 58.93.0893x$2150000019199504796650

3 Year 12345 Sales(EA)740009500012500010500080000 Sales volume($)2664000034200000450000003780000028800000 Variable costs1147000014725000193750001627500012400000 Fixed costs4700000 Opportunity cost1050000 -- Depreciation307235526535376035268535191995 EBIT911276513198465205489651655646511508005 Taxes(35%)-3189467.8-4619463-7192138-5794763-4027801.75 Net income5923297.25857900213356827107617027480203.25

4 Year 12345 EBIT911276513198465205489651655646511508005 Depreciation307235526535376035268535191995 Taxes-3189467.8-4619463-7192138-5794763-4027801.75 OCF6230532.25910553713732862110302377672198.25 Year 012345 OCF 623053291055371373286211030237.257672198.25 NWC(-), 20% of sales 53280006840000900000075600005760000 Initial NWC-950000 Change in NWC(-) -1512000-216000014400001800000432000"A" Capital spending(-)-21500000 4343827.5"B" Total cash flow-22450000471853269455371517286212830237.2512448025.8 "A"NWC recovery "B"Salvage value=4100000-0.35*(4100000-4796650)

5 1. What is the payback period of the project? = 2.71years 2. What is the profitability index of the project? PI= NPV of puture cash flows divided by the initial investment =(I+NPV)/I= (13316849+ 22450000)/22450000= 1.5931 4. What is the NPV of the project? With this cash flows, the NPV at 12percent is NVP=-22450000+4718532/1.12+6945537/(1.12)^2+15172862/(1.12)^3 +12830237/(1.12)^4+12448026/(1.12)^5 =13316849 So, this project appears quite profitable

6 3. What is the IRR? The definition of IRR is the discount rate when NPV is zero. To draw it out trial and error method used her. From the result, the rate(IRR) is supposed to exist between 30.07% and 30.08% Discount rate Rate(%)NPV 206275994 3040436 30.0514573 30.074241 30.08-921 30.1-11243 30.2-62741 30.5-216168 31-468356 32-959874

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