Project NPV

Key Assumptions
Cost of Present Machine Rp554,500,500
Market Value of Present Machine Rp300,450,000
Number Of Period 5
Cost of Proposed Machine Rp867,890,000
Instalation Cost Rp6,578,000
Salvage Value Rp280,308,770
Number Of Period 5
Market Value of Proposed Machine Rp280,800,500
Account Receivable Rp106,545,000
Inventory Rp78,454,500
Account Payable Rp250,217,350
Tax Rate 40%
WACC 15%
Net Working Capital -Rp65,217,850

Book Value Of Proposed Machine :

Cost of Proposed Machine Rp874,468,000
Accumullated Depreciation Rp594,159,230

Book Value Rp280,308,770

Market Value of Proposed Machine Rp280,800,500
Gain/Loss Rp491,730

Book Value Of Present Machine :

Cost of Present Machine Rp554,500,500
Accumullated Depreciation Rp221,800,200

Book Value Rp332,700,300

Market Value of Present Machine Rp300,450,000
Gain/Loss -Rp32,250,300

Initial Investment :
Installed Cost of Proposed Machine
Cost of Proposed Machine Rp867,890,000
+Installation Cost Rp6,578,000
Total Installed Cost - Proposed Rp874,468,000
After Tax Proceeds from sale of Present Machine
Proceeds from sale of Present Machine Rp300,450,000
+/- Tax on Sale of Present Machine -Rp12,900,120
Total after tax proceed - Present Rp313,350,120
Change in Net Working Capital -Rp65,217,850
Intial Investment Rp495,900,030

Depreciation Forecast
Year 1 2 3 4 5
Rp118,831,84 Rp118,831,84 Rp118,831,84
New Depreciation Rp118,831,846 6 6 6 Rp118,831,846
Rp110,900,10 Rp110,900,10
- Old Depreciation Rp110,900,100 0 0 0 0
Rp118,831,84
Δ Depreciation Rp7,931,746 Rp7,931,746 Rp7,931,746 6 Rp118,831,846

Sales Revenue
Year 1 2 3 4 5
Proposed Machines Rp100,346,550 Rp100,346,55 Rp100,346,55 Rp100,346,55 Rp100,346,550
0 0 0
- Present Machines Rp123,000,400 Rp80,550,000 Rp90,443,200 Rp70,913,000 Rp90,887,000
(Rp22,653,850
Δ Sales Revenue ) Rp19,796,550 Rp9,903,350 Rp29,433,550 Rp9,459,550

Operating Expenses
Year 11 2 3 4 5
Proposed Machines Rp60,443,200 Rp60,443,200 Rp60,443,200 Rp60,443,200 Rp60,443,200
- Present Machines Rp50,455,000 Rp49,990,650 Rp50,116,600 Rp49,880,400 Rp55,690,600
Δ Operating Expenses Rp9,988,200 Rp10,452,550 Rp10,326,600 Rp10,562,800 Rp4,752,600

Cash Flow Forecasts

Δ Sales Revenue -Rp22,653,850 Rp19,796,550 Rp9,903,350 Rp29,433,550 Rp9,459,550

- ΔOperating Expense Rp9,988,200 Rp10,452,550 Rp10,326,600 Rp10,562,800 Rp4,752,600
Δ Gross Margin -Rp32,642,050 Rp9,344,000 -Rp423,250 Rp18,870,750 Rp4,706,950
Rp118,831,84
- ΔDepreciation Rp7,931,746 Rp7,931,746 Rp7,931,746 6 Rp118,831,846
Δ Operating Profit -Rp40,573,796 Rp1,412,254 -Rp8,354,996 -Rp99,961,096 -Rp114,124,896
- ΔTaxes -Rp16,229,518 Rp564,902 -Rp3,341,998 -Rp39,984,438 -Rp45,649,958
Δ Net Profit -Rp24,344,278 Rp847,352 -Rp5,012,998 -Rp59,976,658 -Rp68,474,938
Rp118,831,84
+ ΔAdd Back Depreciation Rp7,931,746 Rp7,931,746 Rp7,931,746 6 Rp118,831,846
Δ Operating Cash Flow -Rp16,412,532 Rp8,779,098 Rp2,918,748 Rp58,855,188 Rp50,356,908

Incremental Cash Inflow -Rp16,412,532 Rp8,779,098 Rp2,918,748 Rp58,855,188 Rp50,356,908

 NPV : Replacement

Number of Period 0 1 2 3 4 5
Initial Investment Rp495,900,030
- Rp2,918,74
Cash Inflow Rp16,412,532 Rp8,779,098 8 Rp58,855,188 Rp50,356,908
- Rp1,919,12
PV Cash inflow   Rp14,271,767 Rp6,638,260 4 Rp33,650,645 Rp25,036,283
Total PV Cash inflow Rp52,972,546
PV Terminal Cash Flow Rp107,084,887

-
Net Present Value Rp335,842,597

Kesimpulan: Karena NPV <0, maka project replacement ini harus ditolak.