Income Statement (KUSD) 0 1 2 3 4 5 6 7 8 9 10

Sales 16,500 19,250 22,000 24,750 26,125 26,950 27,500 27,500 27,500 27,500
Cost of Sales 11,616 13,552 15,488 17,424 18,392 18,973 19,360 19,360 19,360 19,360
Gross Profit 4,884 5,698 6,512 7,326 7,733 7,977 8,140 8,140 8,140 8,140
Operating Costs
Depreciation 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660
Operating Profit 3,224 4,038 4,852 5,666 6,073 6,317 6,480 6,480 6,480 6,480
Other income 0 0 0 0 0 0 0 0 0 0
Integral cost of financing 0 0 0 0 0 0 0 0 0 0
Utilities before taxes 3,224 4,038 4,852 5,666 6,073 6,317 6,480 6,480 6,480 6,480
Worker´s participation in the utilities 10% 322 404 485 567 607 632 648 648 648 648
Rent Tax 30% 967 1,211 1,456 1,700 1,822 1,895 1,944 1,944 1,944 1,944
Net Utilities 1,934 2,423 2,911 3,400 3,644 3,790 3,888 3,888 3,888 3,888

Cash Flow Statement (KUSD) 0 1 2 3 4 5 6 7 8 9 10

+ Net Utilities 0 1,934 2,423 2,911 3,400 3,644 3,790 3,888 3,888 3,888 3,888
+ Depreciation 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660
- Investments on fixed assets -12,500 0 0 1,000 0 0 1,000 0 0 12,500 0
- Additional Investments -1,488 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522
- Investment on Net working capital -1,414 -236 -236 -236 -118 -71 -47 0 0 0 2,357
= Net cash flow -15,402 3,359 3,847 4,336 4,942 5,233 5,403 5,548 5,548 5,548 7,905

REPAIRED FURNACE Company in operation

There are two ways to
Project Evaluation Accept The project is accepted
Buy a new furnace… m
Lifespan (years) 10 The lifespan is given to us
Repair existing furnac
Net Present Value (NPV) 11,894.0 Initial Cash Flow year 0 + NPV (MARR given 12% , Sum cash flows 1 to 10 E21:N21) Which is the the
Annual Net Value (ANV) 2,105.1 The formula -PMT ), Lifespan, Net present value
Minimum attractive rate of return (MARR) 12.0% The Minimum attractive rate of return (MARR) was given to us.
Internal Rate of Return (IRR) 26.5040% The formula IRR(Net cash flow 0 to year 10 times the Marr
Payback period (years) 3.8 Payback period Year 0 information is brought up from Payback period on the investment
Payback period at present value (years) 5.1 Discounted payback Year 0 information is brought up from Payback period on the investment

Base information 0 1 2 3 4 5 6 7 8 9 10
Demand ton/year 4.00% 190,000 197,600 205,504 213,724 222,273 231,164 240,411 250,027 260,028 270,429
Installed capacity ton/year 220,000 220,000 220,000 220,000 220,000 220,000 220,000 220,000 220,000 220,000
Learning Curve 60% 70% 80% 90% 95% 98% 100% 100% 100% 100%
Operative Capacity ton/year 132,000 154,000 176,000 198,000 209,000 215,600 220,000 220,000 220,000 220,000
Sales volume ton/year 132,000 154,000 176,000 198,000 209,000 215,600 220,000 220,000 220,000 220,000
Unit price USD/ton 125 125 125 125 125 125 125 125 125 125
Unit Cost USD/ton 88 88 88 88 88 88 88 88 88 88
Margin 29.60%
Annual fixed cost KUSD 490 490 490 490 490 490 490 490 490 490
Investment Budget (KUSD) 0 1 2 3 4 5 6 7 8 9 10
Fixed assets
Land
Infrastructure
Machinery 11,500 11,500
Transport Equipment 0 0
Telecommunications equipment 1,000 1,000 1,000 1,000
Total Fixed Assets 12,500 0 0 1,000 0 0 1,000 0 0 12,500 0

Initial Expenses (KUSD) 0 1 2 3 4 5 6 7 8 9 10

Installations 1,300
Legal advisory
Labor law
Recruitment consulting
Launch
Contingencies 1.5% 188
Total investments 1,488 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

Rescue Values (KUSD) Comercial V 0 1 2 3 4 5 6 7 8 9 10

Land 100% 0
Infrastructure 35% 0
Machinery 9% 1,278
Transport Equipment 16% 0
Telecommunications equipment 10% 333
Total Rescue Value 0 0 0 0 0 0 0 0 0 0 1,611

Depreciation Amounts (KUSD) 0 1 2 3 4 5 6 7 8 9 10

Land 0 0 0 0 0 0 0 0 0 0
Infrastructure 20 0 0 0 0 0 0 0 0 0 0
Machinery 9 1,278 1,278 1,278 1,278 1,278 1,278 1,278 1,278 1,278 1,278
Transport Equipment 4 0 0 0 0 0 0 0 0 0 0
Telecommunications Equipment 3 333 333 333 333 333 333 333 333 333 333
Initial expenses 10 49 49 49 49 49 49 49 49 49 49
Total Depreciation 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660 1,660

Accumulated Depreciation (KUSD) 0 1 2 3 4 5 6 7 8 9 10

Land 0 0 0 0 0 0 0 0 0 0
Infrastructure 0 0 0 0 0 0 0 0 0 0
Machinery 1,278 2,556 3,833 5,111 6,389 7,667 8,944 10,222 11,500 12,778
Transport Equipment 0 0 0 0 0 0 0 0 0 0
Telecommunications Equipment 333 667 1,000 1,333 1,667 2,000 2,333 2,667 3,000 3,333
Initial Expenses 49 98 147 196 245 294 343 392 441 490
Total Depreciation 1,660 3,320 4,980 6,640 8,301 9,961 11,621 13,281 14,941 16,601
Net Fixed Assets (KUSD) 0 1 2 3 4 5 6 7 8 9 10
Land 11,500 11,500 11,500 11,500 11,500 11,500 11,500 11,500 11,500 23,000 23,000
Infrastructure 0 -1,278 -2,556 -3,833 -5,111 -6,389 -7,667 -8,944 -10,222 -11,500 -12,778
Machinery 1,000 1,000 1,000 2,000 2,000 2,000 3,000 3,000 3,000 4,000 4,000
Transport Equipment 12,500 12,167 11,833 12,500 12,167 11,833 12,500 12,167 11,833 24,000 23,667
Telecommunications Equipment 0 -49 -98 -147 -196 -245 -294 -343 -392 -441 -490
Initial Expenses 0 -1,659 -3,317 -4,974 -6,630 -8,286 -9,940 -11,593 -13,245 -14,896 -16,546
Total Net Fixed Assets 25,000 23,340 21,680 22,020 20,360 18,699 19,039 17,379 15,719 39,059 37,399

Working Capital Days-Sales IVA 0 1 2 3 4 5 6 7 8 9 10

Cash 1.2 55 64 73 83 87 90 92 92 92 92 0
Accounts receivable 40 16% 2,127 2,481 2,836 3,190 3,367 3,474 3,544 3,544 3,544 3,544 0
Inventories 20 917 1,069 1,222 1,375 1,451 1,497 1,528 1,528 1,528 1,528 0
Total balance of working capital 3,098 3,615 4,131 4,648 4,906 5,061 5,164 5,164 5,164 5,164 0
Investments on working capital
Cash 55 9 9 9 5 3 2 0 0 0 -92
Accounts receivable 2,127 354 354 354 177 106 71 0 0 0 -3,544
Inventories 917 153 153 153 76 46 31 0 0 0 -1,528
Total investments in working capital 3,098 516 516 516 258 155 103 0 0 0 -5,164

Current Liabilities (working capital) Days-Credit IVA 0 1 2 3 4 5 6 7 8 9 10

Raw materials Suppliers 45 16% 1,684 1,965 2,246 2,526 2,667 2,751 2,807 2,807 2,807 2,807 0
Suppliers others 0 0 0 0 0 0 0 0 0 0 0
Taxes payable 0 0 0 0 0 0 0 0 0 0 0
Total balance current liabilities 1,684 1,965 2,246 2,526 2,667 2,751 2,807 2,807 2,807 2,807 0
Investments on current liabilities
Raw materials Suppliers 1,684 281 281 281 140 84 56 0 0 0 -2,807
Suppliers others 0 0 0 0 0 0 0 0 0 0 0
Taxes payable 0 0 0 0 0 0 0 0 0 0 0
Total investments in current liabilities 1,684 281 281 281 140 84 56 0 0 0 -2,807

Payback period of the investment 0 1 2 3 4 5 6 7 8 9 10

Net cash flow -15,402 3,359 3,847 4,336 4,942 5,233 5,403 5,548 5,548 5,548 7,905
Accumulated net cash flow -15,402 -12,043 -8,196 -3,860 1,082 6,315 11,718 17,266 22,814 28,362 36,267
Payback period 3.78108763 1 1 1 0.7810876 0 0 0 0 0 0
(F/P,MARR,n)
(P/F,MARR,n) 1 0.8928571 0.7971939 0.7117802 0.6355181 0.5674269 0.5066311 0.4523492 0.4038832 0.36061 0.3219732
Discounted net cash flow (at present value) -15,402 2,999 3,067 3,086 3,141 2,969 2,737 2,510 2,241 2,001 2,545
Accumulated discounted net cash flow -15,402 -12,403 -9,336 -6,250 -3,109 -140 2,598 5,107 7,348 9,349 11,894
Discounted payback period 5.0510143 1 1 1 1 1 0.0510143 0 0 0 0

Proove results 0 1 2 3 4 5 6 7 8 9 10
Discount factor in interests (F/P) 1 1.12 1.2544 1.404928 1.5735194 1.7623417 1.9738227 2.2106814 2.4759632 2.7730788 3.1058482
Discounted net cash cash flows -15,402 2,999 3,067 3,086 3,141 2,969 2,737 2,510 2,241 2,001 2,545
 Multiply sales in pieces and unit price from Step 1 and then divide the result with 1000
Multiply sales in pieces with Unit Cost from Step 1 and then divide the result with 1000
Calulate the total by subtracting the cost of sales from sales.
Operation costs were not given to us
Get the data from the total depreciation
Subract Depretiation from Operation cost from Gross Profit
Everything you sell that´s not your core business
In this case 0
Sum Operating profit and Other income (rescue values)
Multiply the utilities before taxes with 10%
Multiply the utilities before taxes with 30%
Subract Utilities before taxes with Worker´s participation in the utilities and Net Utilities

We bring Net utilities down from the Income Statement

We bring up Depreciations in positive
We bring up Total fixed assets in Negative
We bring up Total investments in Negative
Assets minus liabilities
Total Sum

mpany in operation. Furnace reaches end of its lifespan.

re are two ways to continue operations:
a new furnace… more expensive.. More capacity… less cost.
air existing furnace… less expensive… less capacity… higher cost
Which is the the most profitable alternative for the company?

This is the first step we did

They gave us 190000 in year one, so for year two-ten, what we’ll do is multiply the year before with the sum of one plus the percentage of increment. This is repeated until year 10
We first pass the information in from the year one, because 220000 is the maximum number that it can produce.
We received the learning curve in the case
We multiply the Installed Capacity to the Learning Curve to achieve Operative Capacity. We can see here, that the capacity reduces in various years due to the learning curve.
This is the the lowest of Sales and Capacity each year
This is given
This is given
The formula for this step is (Unit Price-Unit Cost)/Unit Price
This is given
We weren't given data
We weren't given data
We weren't given data
Here, we compare with depreciation amounts in order to see the lifespan of each and place it in this table

The data here is given by the document

Here we multiply the Total Fixed Assets with 0.01 to achieve the 1% of Total Assets
And we do the total sum

Land has an 100% rescue value

Here, we multiply the commercial percentage with the investment budget
A commercial percentage is given which we then multiply with the investment budget. Because this updated every 9 years, we then have to repeat the processs in year 9 and then again at 9. In year ten, we divide the inve
Here, we multiply the commercial percentage with the investment budget
A commercial percentage is given which we then multiply with the investment budget. Because this updated every 3 years, we then have to repeat the processs in year 3 and then again at 3. In year ten, we divide the inve
Total Sum

There is no depreciation as it has a 100% rescue value

Sum of the years , Only up to the year in question, and that number divided by the lifespan
Sum of the years , Only up to the year in question, and that number divided by the lifespan
Sum of the years , Only up to the year in question, and that number divided by the lifespan
Sum of the years , Only up to the year in question, and that number divided by the lifespan
Sum of the years , Only up to the year in question, and that number divided by the lifespan
Total sum

The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
Total Sum
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Total Sum

The formula would be IF (Years < Project Lifespan 10 years , TRUE Sales from IncStatement/360days*1daysCash*(1+0) , FALSE 0)
IF (Years < Project Lifespan 10 years , TRUE Sales from IncStatement/360days*45daysAccsReceiv*(1+0.16) , FALSE 0)
IF (Years < Project Lifespan 10 years , TRUE Sales from IncStatement/360days*20days Inventories*(1+0) , FALSE 0)
Total Sum

Subtract the Capital from the year before, everything must be given back at the end of the investment period in year 10, that´s why it’s negative.
Subtract the Capital from the year before, everything must be given back at the end of the investment period in year 10, that´s why it’s negative.
Subtract the Capital from the year before, everything must be given back at the end of the investment period in year 10, that´s why it’s negative.
Total Sum

IF (Years < Project Lifespan 10 years , TRUE credit from IncStatement/360days*60daysRawMaterials*(1+0.15) , FALSE 0)
IF (Years < Project Lifespan 10 years , TRUE credit from IncStatement/360days*0daysSuppliersOthers*(1+0) , FALSE 0)
IF (Years < Project Lifespan 10 years , TRUE credit from IncStatement/360days*0daysTaxesPayable*(1+0) , FALSE 0)
Total Sum

Subtracting the capital from the year before, everything you must pay on debts (liabilities) at the end of 10th year
Subtracting the capital from the year before, everything you must pay on debts (liabilities) at the end of 10th year
Subtracting the capital from the year before, everything you must pay on debts (liabilities) at the end of 10th year
Total Sum

Bring down the Net Cash flow

Sum the previous accumulated net cash and the Net cash flow.
formula IF(2nd Year Value < 0,1 ,IF(1st Year < 0 , 1st YrValue / (1st YrValue - 2nd Yr Value), 0))

Calculate 1/ Discount factor in interests (F/P)

Multiply Net Cash flow and (P/F,MARR,n)
Sum the previous Accumulated discounted net cash flow and the Discounted net cash flow (at present value)
The formula IF(2nd Year Value < 0,1,IF(1st Year < 0 , 1st YrValue / (1st YrValue - 2nd Yr Value), 0))

One must multiply the year before by the result of the sum of 1 and MARR
Divide the Net cash flow with the discount factor in interests
11,894 Proof of NPV
Sum of all discounted cash flows
ar ten, we divide the investment budget in year 9 in 9. The last year must be proportionate to the resting years.

ar ten, we divide the investment budget in year 9 in 3. The last year must be proportionate to the resting years.
Income Statement (KUSD) 0 1 2 3 4 5 6 7 8 9 10
Sales 0 22 23 24 26 27 28 29 31 32 33
Cost of Sales 0 17 17 18 19 20 21 22 23 24 25
Gross Profit 0 6 6 6 7 7 7 8 8 8 9
Operating Costs
Depreciation 0 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,744
Operating Profit 0 -1,927 -1,927 -1,927 -1,926 -1,926 -1,926 -1,926 -1,925 -1,925 -1,736
Other income 0 0 0 0 0 0 0 0 0 0 0
Integral cost of financing 0 0 0 0 0 0 0 0 0 0 0
Utilities before taxes 0 -1,927 -1,927 -1,927 -1,926 -1,926 -1,926 -1,926 -1,925 -1,925 -1,736
Worker´s participation in the utilities 11.2% 0 -216 -216 -216 -216 -216 -216 -216 -216 -216 -194
Rent Tax 28.3% 0 -545 -545 -545 -545 -545 -545 -545 -545 -545 -491
Net Utilities 0 -1,166 -1,166 -1,166 -1,166 -1,165 -1,165 -1,165 -1,165 -1,165 -1,050

Cash Flow Statement (KUSD) 0 1 2 3 4 5 6 7 8 9 10

+ Net Utilities 0 -1,166 -1,166 -1,166 -1,166 -1,165 -1,165 -1,165 -1,165 -1,165 -1,050
+ Depreciation 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,744
- Investments on fixed assets -14,450 0 0 1,250 0 0 1,250 0 0 12,750 0
- Additional Investments -3,073 0 0 0 0 0 0 0 0 0 0
- Investment on Net working capital -2 0 0 0 0 0 0 0 0 0 3
= Net cash flow -17,525 767 767 767 768 768 768 768 768 769 697

NEW FURNACE Company in operation. Furn

There are two ways to conti
Buy a new furnace… more e
Project Evaluation Reject The project is rejected Repair existing furnace… le
Lifespan (years) 10 The lifespan is given to us Which is the the mo
Net Present Value (NPV) -13,210.8 Initial Cash Flow year 0 + NPV (MARR given 12% , Sum cash flows 1 to 10 E21:N21)
Annual Net Value (ANV) -2,338.1 The formula -PMT ), Lifespan, Net present value
Minimum attractive rate of return (MARR) 12.0% The Minimum attractive rate of return (MARR) was given to us.
Internal Rate of Return (IRR) -12.9547% The formula IRR(Net cash flow 0 to year 10 times the Marr
Payback period (years) 10.0 Payback period Year 0 information is brought up from Payback period on the investment
Payback period at present value (years) 10.0 Discounted payback Year 0 information is brought up from Payback period on the investment

Base information 0 1 2 3 4 5 6 7 8 9 10
Demand ton/year 4.50% 195 204 213 223 233 243 254 265 277 290
Installed capacity ton/year 283,000 283,000 283,000 283,000 283,000 283,000 283,000 283,000 283,000 283,000
Learning Curve 70% 88% 90% 92% 98% 99% 99% 99% 99% 99%
Operative Capacity ton/year 198,100 249,040 254,700 260,360 277,340 280,170 280,170 280,170 280,170 280,170
Sales volume ton/year 195 204 213 223 233 243 254 265 277 290
Unit price USD/ton 115 115 115 115 115 115 115 115 115 115
Unit Cost USD/ton 85 85 85 85 85 85 85 85 85 85
Margin 26.09%
Annual fixed cost KUSD 498 498 498 498 498 498 498 498 498 498
Investment Budget (KUSD) 0 1 2 3 4 5 6 7 8 9 10
Fixed assets
Land
Infrastructure
Machinery 13,200 11,500
Transport Equipment 0 0
Telecommunications equipment 1,250 1,250 1,250 1,250
Total Fixed Assets 14,450 0 0 1,250 0 0 1,250 0 0 12,750 0

Initial Expenses (KUSD) 0 1 2 3 4 5 6 7 8 9 10

Installations 2,900
Legal advisory
Labor law
Recruitment consulting
Launch
Contingencies 1.2% 173
Total investments 3,073 0 0 0 0 0 0 0 0 0 0

Rescue Values (KUSD) Commercial 0 1 2 3 4 5 6 7 8 9 10

Land 100%
Infrastructure 38%
Machinery 12% 1,584
Transport Equipment 14%
Telecommunications equipment 8% 100
Total Rescue Value 0 0 0 0 0 0 0 0 0 1,684

Depreciation Amounts (KUSD) 0 1 2 3 4 5 6 7 8 9 10

Land 0 0 0 0 0 0 0 0 0 0
Infrastructure 20 0 0 0 0 0 0 0 0 0 0
Machinery 9 1,467 1,467 1,467 1,467 1,467 1,467 1,467 1,467 1,467 1,278
Transport Equipment 4 0 0 0 0 0 0 0 0 0 0
Telecommunications Equipment 3 417 417 417 417 417 417 417 417 417 417
Initial expenses 10 50 50 50 50 50 50 50 50 50 50
Total Depreciation 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,933 1,744

Accumulated Depreciation (KUSD) 0 1 2 3 4 5 6 7 8 9 10

Land 0 0 0 0 0 0 0 0 0 0
Infrastructure 0 0 0 0 0 0 0 0 0 0
Machinery 1,467 2,933 4,400 5,867 7,333 8,800 10,267 11,733 13,200 14,478
Transport Equipment 0 0 0 0 0 0 0 0 0 0
Telecommunications Equipment 417 833 1,250 1,667 2,083 2,500 2,917 3,333 3,750 4,167
Initial Expenses 50 100 149 199 249 299 349 398 448 498
Total Depreciation 1,933 3,866 5,799 7,733 9,666 11,599 13,532 15,465 17,398 19,142
Net Fixed Assets (KUSD) 0 1 2 3 4 5 6 7 8 9 10
Land 13,200 13,200 13,200 13,200 13,200 13,200 13,200 13,200 13,200 24,700 24,700
Infrastructure 0 -1,467 -2,933 -4,400 -5,867 -7,333 -8,800 -10,267 -11,733 -13,200 -14,478
Machinery 1,250 1,250 1,250 2,500 2,500 2,500 3,750 3,750 3,750 5,000 5,000
Transport Equipment 14,450 14,033 13,617 14,450 14,033 13,617 14,450 14,033 13,617 25,950 25,533
Telecommunications Equipment 0 -50 -100 -149 -199 -249 -299 -349 -398 -448 -498
Initial Expenses 0 -1,932 -3,863 -5,793 -7,723 -9,651 -11,578 -13,504 -15,429 -17,353 -19,087
Total Net Fixed Assets 28,900 26,967 25,034 25,601 23,667 21,734 22,301 20,368 18,435 42,002 40,258

Working Capital Days-Sales IVA 0 1 2 3 4 5 6 7 8 9 10

Cash 1.2 0 0 0 0 0 0 0 0 0 0 0
Accounts receivable 40 16% 3 3 3 3 3 4 4 4 4 4 0
Inventories 20 1 1 1 1 1 2 2 2 2 2 0
Total balance of working capital 4 4 5 5 5 5 5 6 6 6 0
Investments on working capital
Cash 0 0 0 0 0 0 0 0 0 0 0
Accounts receivable 3 0 0 0 0 0 0 0 0 0 -4
Inventories 1 0 0 0 0 0 0 0 0 0 -2
Total investments in working capital 4 0 0 0 0 0 0 0 0 0 -6

Current Liabilities (working capital) Days-Credit IVA 0 1 2 3 4 5 6 7 8 9 10

Raw materials Suppliers 45 16% 2 3 3 3 3 3 3 3 3 4 0
Suppliers others 0 0 0 0 0 0 0 0 0 0 0
Taxes payable 0 0 0 0 0 0 0 0 0 0 0
Total balance current liabilities 2 3 3 3 3 3 3 3 3 4 0
Investments on current liabilities
Raw materials Suppliers 2 0 0 0 0 0 0 0 0 0 -4
Suppliers others 0 0 0 0 0 0 0 0 0 0 0
Taxes payable 0 0 0 0 0 0 0 0 0 0 0
Total investments in current liabilities 2 0 0 0 0 0 0 0 0 0 -4

Payback period of the investment 0 1 2 3 4 5 6 7 8 9 10

Net cash flow -17,525 767 767 767 768 768 768 768 768 769 697
Accumulated net cash flow -17,525 -16,758 -15,991 -15,224 -14,456 -13,688 -12,920 -12,152 -11,384 -10,616 -9,919
Payback period 10 1 1 1 1 1 1 1 1 1 1
(F/P,MARR,n)
(P/F,MARR,n) 1 0.8928571 0.7971939 0.7117802 0.6355181 0.5674269 0.5066311 0.4523492 0.4038832 0.36061 0.3219732
Discounted net cash flow (at present value) -17,525 685 612 546 488 436 389 347 310 277 224
Accumulated discounted net cash flow -17,525 -16,840 -16,229 -15,683 -15,195 -14,759 -14,370 -14,023 -13,712 -13,435 -13,211
Discounted payback period 10 1 1 1 1 1 1 1 1 1 1

STEP 13 - Proove results

Discount factor in interests (F/P) 1 1.12 1.2544 1.404928 1.5735194 1.7623417 1.9738227 2.2106814 2.4759632 2.7730788 3.1058482
Discounted net cash cash flows -17,525 685 612 546 488 436 389 347 310 277 224
 Multiply sales in pieces and unit price from Step 1 and then divide the result with 1000
Multiply sales in pieces with Unit Cost from Step 1 and then divide the result with 1000
Calulate the total by subtracting the cost of sales from sales.
Operation costs were not given to us
Get the data from the total depreciation
Subract Depretiation from Operation cost from Gross Profit
Everything you sell that´s not your core business
In this case 0
Sum Operating profit and Other income (rescue values)
Multiply the utilities before taxes with 10%
Multiply the utilities before taxes with 30%
Subract Utilities before taxes with Worker´s participation in the utilities and Net Utilities

We bring Net utilities down from the Income Statement

We bring up Depreciations in positive
We bring up Total fixed assets in Negative
We bring up Total investments in Negative
Assets minus liabilities
Total Sum

in operation. Furnace reaches end of its lifespan.

e two ways to continue operations:
w furnace… more expensive.. More capacity… less cost.
isting furnace… less expensive… less capacity… higher cost
ch is the the most profitable alternative for the company?
As we can see here, the most profitable alternative for
the company would be to repair the furnace, as it is the
only one of the two projects that is accepted.

This is the first step we did

They gave us 195 in year one, so for year two-ten, what we’ll do is multiply the year before with the sum of one plus the percentage of increment. This is repeated until year 10
We first pass the information in from the year one, because 283000 is the maximum number that it can produce.
We received the learning curve in the case
We multiply the Installed Capacity to the Learning Curve to achieve Operative Capacity. We can see here, that the capacity reduces in various years due to the learning curve.
This is the the lowest of Sales and Capacity each year
This is given
This is given
The formula for this step is (Unit Price-Unit Cost)/Unit Price
This is given
We weren't given data
We weren't given data
We weren't given data
Here, we compare with depreciation amounts in order to see the lifespan of each and place it in this table

The data here is given by the document

Here we multiply the Total Fixed Assets with 0.01 to achieve the 1% of Total Assets
And we do the total sum

Land has an 100% rescue value

Here, we multiply the commercial percentage with the investment budget
A commercial percentage is given which we then multiply with the investment budget. Because this updated every 9 years, we then have to repeat the processs in year 9 and then again at 9. In year ten, we divide the inve
Here, we multiply the commercial percentage with the investment budget
A commercial percentage is given which we then multiply with the investment budget. Because this updated every 3 years, we then have to repeat the processs in year 3 and then again at 3. In year ten, we divide the inve
Total Sum

There is no depreciation as it has a 100% rescue value

Sum of the years , Only up to the year in question, and that number divided by the lifespan
Sum of the years , Only up to the year in question, and that number divided by the lifespan
Sum of the years , Only up to the year in question, and that number divided by the lifespan
Sum of the years , Only up to the year in question, and that number divided by the lifespan
Sum of the years , Only up to the year in question, and that number divided by the lifespan
Total sum

The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
The Depreciation amounts in the same year+ Accumlative Depreciation of the year before
Total Sum
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Assets value - Accum Depreciation
Total Sum

The formula would be IF (Years < Project Lifespan 10 years , TRUE Sales from IncStatement/360days*1daysCash*(1+0) , FALSE 0)
IF (Years < Project Lifespan 10 years , TRUE Sales from IncStatement/360days*45daysAccsReceiv*(1+0.16) , FALSE 0)
IF (Years < Project Lifespan 10 years , TRUE Sales from IncStatement/360days*20days Inventories*(1+0) , FALSE 0)
Total Sum

Subtract the Capital from the year before, everything must be given back at the end of the investment period in year 10, that´s why it’s negative.
Subtract the Capital from the year before, everything must be given back at the end of the investment period in year 10, that´s why it’s negative.
Subtract the Capital from the year before, everything must be given back at the end of the investment period in year 10, that´s why it’s negative.
Total Sum

IF (Years < Project Lifespan 10 years , TRUE credit from IncStatement/360days*60daysRawMaterials*(1+0.15) , FALSE 0)
IF (Years < Project Lifespan 10 years , TRUE credit from IncStatement/360days*0daysSuppliersOthers*(1+0) , FALSE 0)
IF (Years < Project Lifespan 10 years , TRUE credit from IncStatement/360days*0daysTaxesPayable*(1+0) , FALSE 0)
Total Sum

Subtracting the capital from the year before, everything you must pay on debts (liabilities) at the end of 10th year
Subtracting the capital from the year before, everything you must pay on debts (liabilities) at the end of 10th year
Subtracting the capital from the year before, everything you must pay on debts (liabilities) at the end of 10th year
Total Sum

Bring down the Net Cash flow

Sum the previous accumulated net cash and the Net cash flow.
formula IF(2nd Year Value < 0,1 ,IF(1st Year < 0 , 1st YrValue / (1st YrValue - 2nd Yr Value), 0))

Calculate 1/ Discount factor in interests (F/P)

Multiply Net Cash flow and (P/F,MARR,n)
Sum the previous Accumulated discounted net cash flow and the Discounted net cash flow (at present value)
The formula IF(2nd Year Value < 0,1,IF(1st Year < 0 , 1st YrValue / (1st YrValue - 2nd Yr Value), 0))

One must multiply the year before by the result of the sum of 1 and MARR
Divide the Net cash flow with the discount factor in interests
-13,211 Proof of NPV
Sum of all discounted cash flows
ar ten, we divide the investment budget in year 9 in 9. The last year must be proportionate to the resting years.

ar ten, we divide the investment budget in year 9 in 3. The last year must be proportionate to the resting years.