1.
a. NPV = 10 mln / 1.1 =$ 9.090.909
NPV = 10 mln – 7 mln / 1.1 – 7 mln / 1.1 2 – 7 mln / 1.13 = -7.408 mln
b. 4,9% 49% which means you shouldn’t accept the project. Does not give the right answer (?)
c. NPV including royalty payments = 10 mln / 1.1 + (4 / (0.2 – 0.1)) / 1.1^3 = 39,14 million
Royal payments; delayed perpetuity = 4 mln / (0.1 - -0.2) = 13.33 mln PV = 13..13 = 10.02 mln
NPV = -7.408 + 10.02 = 2.61 mln
2.
a. Project X IRR is 21.5% Project Y IRR is 15.1%
b. You undertake both projects if the cost of capital is 10%, when it’s 20% you only do project X
c. Project Z IRR is 27.2%
So if the cost of capital is 10% you undertake Project Z & Y, if the cost of capital is 25% you only
undertake project Z.
3.
a. EBIT = Revenues – costs of goods sold – administrative expenses – depreciation
Year 1 = 1350 – 400 – 100 – 240 = 610 mln.
Year 2 = 1650 – 600 – 100 – 370 = 580 mln.
b. Total Cash Flow = EBIT + Depreciation - CapEx – diff. NWC
Year 1 = 610 + 240 – 310 – 60 = 720 mln.
Year 2 = 580 + 370 – 520 – 100 = 700 mln.
4.
NPV = 12..1 = 10.909,09 so that means you would undertake the investment
IRR = 20% so that means there is a maximum deviation of 10 percent points.
5.
a. instead of
Year 1 Y. 2 - 9 Y. 10 Year 1-10
C.F. -300.000 -1.500.000 +75.000 C.F. -2.500.000 each year
-75.000 Each year +25.000
- -1.500.000
a. NPV = 10 mln / 1.1 =$ 9.090.909
NPV = 10 mln – 7 mln / 1.1 – 7 mln / 1.1 2 – 7 mln / 1.13 = -7.408 mln
b. 4,9% 49% which means you shouldn’t accept the project. Does not give the right answer (?)
c. NPV including royalty payments = 10 mln / 1.1 + (4 / (0.2 – 0.1)) / 1.1^3 = 39,14 million
Royal payments; delayed perpetuity = 4 mln / (0.1 - -0.2) = 13.33 mln PV = 13..13 = 10.02 mln
NPV = -7.408 + 10.02 = 2.61 mln
2.
a. Project X IRR is 21.5% Project Y IRR is 15.1%
b. You undertake both projects if the cost of capital is 10%, when it’s 20% you only do project X
c. Project Z IRR is 27.2%
So if the cost of capital is 10% you undertake Project Z & Y, if the cost of capital is 25% you only
undertake project Z.
3.
a. EBIT = Revenues – costs of goods sold – administrative expenses – depreciation
Year 1 = 1350 – 400 – 100 – 240 = 610 mln.
Year 2 = 1650 – 600 – 100 – 370 = 580 mln.
b. Total Cash Flow = EBIT + Depreciation - CapEx – diff. NWC
Year 1 = 610 + 240 – 310 – 60 = 720 mln.
Year 2 = 580 + 370 – 520 – 100 = 700 mln.
4.
NPV = 12..1 = 10.909,09 so that means you would undertake the investment
IRR = 20% so that means there is a maximum deviation of 10 percent points.
5.
a. instead of
Year 1 Y. 2 - 9 Y. 10 Year 1-10
C.F. -300.000 -1.500.000 +75.000 C.F. -2.500.000 each year
-75.000 Each year +25.000
- -1.500.000
