The company "F" is considering the possibility of replacing their equipment, which was purchased for 150 thousand rubles. and commissioned four years ago. The technical condition of existing equipment allows it to operate for a further 4 years, after which it will be charged, and the output produced at its production stopped. Currently, the existing equipment can be sold on the net book value at the end of the 4th year.
Modern equipment of the same type with standard service life of 8 years is available for the price of 250 rubles. Its implementation will reduce the annual variable costs of 40 thousand rubles., And to the constant
15 thousand rubles .. Experts believe that in connection with the termination of the project in 4 years new equipment can be sold at a price of 150 rubles.
The cost of capital for the company is 15% income tax rate of 20%. The company uses straight-line method of depreciation.
1) Develop a plan for cash flow and make an assessment of the economic efficiency of the project.
2. How will the efficiency of the project, to use the accelerated depreciation method (the method of the amount of years)? Back up their conclusions relevant calculations.
Having spent 390 thousand. Rub. to develop a new technology, the company "Y" to decide whether to run it in production. Necessary investments are estimated to run in 630 thousand. Rub. It is expected that the life cycle of the project is 13 years, while at the same time, the equipment must be depreciated over 16 years on the straight-line method. By the end of the 13th year, the equipment can be sold at a net book value.
During the first year of the project will require additional working capital in the amount of 160 thousand. Rub., Out of which 125 thousand. Rub. restored by the end of the 13th year. During the first year will have to be spent on the promotion of the product 110 thousand. Rub.
These projections suggest that the proceeds from the sale of the product in the first three years will amount to 300 thousand. Rub. annually; from the 4th to the 8th year - 330 thousand. rub .; from 9 th to 13 th year - 240 thous. rubles. Each year, variable and fixed costs are defined in the 80 th. And 30 th. Rub. respectively.
The income tax rate is 20%, the average cost of capital was determined to be 12%.
1. Develop a plan for cash flow and make an assessment of the economic efficiency of the project.
2. Develop a plan for cash flow, and make an assessment of the economic efficiency of the project, if all other things being equal, the proceeds from the project will be supplied evenly in the amount of 245 thousand. Rub., And the cost of capital will increase to 15%.
Investment company "Y" has addressed to you with the request to assess the risk of the project with the following development scenarios.
The rest of the missing data take from the target 11.
1. Define the criteria NPV, IRR, PI for each scenario and their expected values.