Step 1 operating cash flow of the project

Datas available

year 2020 2021

number of boats 200 300
Price by boat 75000 75000
variable costs 67000 67000
fixed costs 250,000 by quarter

year 2020 2021

total sales 15,000,000 22,500,000
Total variable costs 13,400,000 20,100,000
total fixed cost 1,000,000 1,000,000

EBITDA 600,000 1,400,000

datas on amortization

value Method
Buildings 1,000,000 Straight line
Quality control Equipement 200,000 Straight line
equipment 600,000 declining balance

Amortization

Declining balance value to amortize Amortization Net value

2020 600,000 210,000 390,000

2021 390,000 136,500 253,500
2022 253,500 88,725 164,775
2023 164,775 82,388 82,388
2024 82,388 82,388 0

year 2020 2021

buildings 100,000 100,000
quality control Equipment 40,000 40,000
equipment 210,000 136,500
Total Amortization 350,000 276,500

net profit and operating cash flow

year 2020 2021

EBITDA 600,000 1,400,000
Total Amortization 350,000 276,500
EBIT operating profit before taxes 250,000 1,123,500
 taxes on revenues 100,000 449,400

net profit 150,000 674,100

operating cash flow 500,000 950,600

step 2 Change in NWC

determinant of NWC value

cost of components 32,300

cost of consumable 3,700
Salaries and taxes 12,800
Other production, marketing and
administrative cost
18,200
TOTAL 67,000

conversion
Turnover in days
year 2020 Coefficient
Component inventory 30 0.43
Consumable inventory 30 0.05
unfinished product value 10 0.66
finished products inventory 45 0.89
trade and receivable from customers 45 1.2
VAT on purchase 30 0.14

trade and payable to suppliers 90 0.87

salaries 15 0.09
taxes on salaries 30 0.08
VAT on sales 30 0.2

TOTAL NWC

year 2020 2021

Sales without taxes by day 41,667 62,500
NWC 1,324,833 1,987,250
change in NWC 1,324,833 662,417

Step 3 Net flows statement of the project

year 1/1/2019 1/1/2020 12/31/2020

Cash out
Buidings 600,000 400,000
Equipment 300,000 300,000
Ground 400,000
control quality equipment 200,000
change NWC (net cash out) 1,324,833 662,417
total cash out 1,300,000 2,224,833 662,417

Cash in
operating cash flow 500,000
Salvage value
Recovery of NWC year 5
Total Cash in 500,000

net financial flows -1,300,000 -2,224,833 -162,417

Capex -1,300,000 -3,524,833

Discount rate 0.098

Discounted net flows -1,300,000 -2,026,260 -134,718

ROI -1,300,000 -3,326,260 -3,460,978

step 4 Impact of funding solution

Impact scenario 1 New discount rate

discounted net flows -1,300,000 -1,986,458 -129,478

ROI -1,300,000 -3,286,458 -3,415,936

Impact of scenario 3

Repayment method Yearly instalment

2020 2021 2022

outstanding capital 1,320,000 1,079,400 827,973
Annual instalments 300,000 300,000 300,000
annual interest 59,400 48,573 37,259
Capital repayed 240,600 251,427 262,741

financial flow including financial flows from scenario 3

year 1/1/2019 1/1/2020 12/31/2020

net financial flows -1,300,000 -2,224,833 -162,417
+ cash from loan 1,320,000
.- repayments 300,000
.+ tax shield on interest expenses 23,760
net financial flows including scenario -1,300,000 -904,833 -438,657
3
discounted net flows under sce 3 -1,300,000 -824,074 -363,848
 2022 2023 2024
350 400 450
75000 75000 75000
67000 67000 67000

2022 2023 2024

26,250,000 30,000,000 33,750,000
23,450,000 26,800,000 30,150,000
1,000,000 1,000,000 1,000,000

1,800,000 2,200,000 2,600,000

number of years
10 Salvage value 500,000
5
5

declining balance straight line year

coefficient 1,75 after year
0.35 0.2
0.35 0.25
0.35 0.333
0.35 0.5
0.35 1
take the higher amortization rate

2022 2023 2024

100,000 100,000 100,000
40,000 40,000 40,000
88,725 82,388 82,388
228,725 222,388 222,388

2022 2023 2024

1,800,000 2,200,000 2,600,000
228,725 222,388 222,388
1,571,275 1,977,613 2,377,613
 628,510 791,045 951,045

942,765 1,186,568 1,426,568

1,171,490 1,408,955 1,648,955

Average unfinished product value 49,650

price by boat 75,000
Taxes on salaries 5,760 salaries 7,040

VAT 0.2

Days of sales Sales without

Valeur
excluding taxes taxes by day
12.92 41,667 538,333 total inventories
1.48 41,667 61,667 2,550,833
6.62 41,667 275,833
40.20 41,667 1,675,000
54.00 41,667 2,250,000
4.34 41,667 180,667
Total cash out 4,981,500

78.05 41,667 3,252,000

1.41 41,667 58,667
2.30 41,667 96,000
6.00 41,667 250,000
Total cash in 3,656,667

32 1,324,833

2022 2023 2024

72,917 83,333 93,750
2,318,458 2,649,667 2,980,875
331,208 331,208 331,208

12/31/2021 12/31/2022 12/31/2023 12/31/2024

 331,208 331,208 331,208
331,208 331,208 331,208

950,600 1,171,490 1,408,955 1,648,955

500,000
2,980,875
950,600 1,171,490 1,408,955 5,129,830

619,392 840,282 1,077,747 5,129,830

NPV
467,906 578,117 675,313 2,927,446 1,187,804
-2,993,072 -2,414,956 -1,739,643 1,187,804
4 years and 7 months

0.12 = to cost of equity

NPV
440,871 534,014 611,542 2,598,932 769,423
-2,975,065 -2,441,051 -1,829,509 769,423

amount of loan 1320000 equity funding 2,2 millions WACC = 0,098

interest rate 0.045
annual repayment 300,000 equity 2,204,833

2023 2024
565,232 290,667
300,000 300,000 Total
25,435 13,080 183,747
274,565 286,920

12/31/2021 12/31/2022 12/31/2023 12/31/2024

619,392 840,282 1,077,747 5,129,830

300,000 300,000 300,000 300,000

19,429 14,904 10,174 5,232
338,821 555,185 787,921 4,835,062
NPV
255,955 381,969 493,709 2,759,231 1,402,941
other repayment solutions

straight line repayment interest 0.045

number of years 5
2019 2020
outstanding capital 1,320,000 1,056,000
capital repayed 264,000 264,000
interest expenses 59,400 47,520
instalment 323,400 311,520

In fine
2019 2020
outstanding capital 1,320,000 1,320,000
capital repayed 0 0
interest expenses 59,400 59,400
instalment 59,400 59,400
 amount of loan 1320000

2021 2022 2023

792,000 528,000 264,000
264,000 264,000 264,000 Total
35,640 23,760 11,880 178,200
299,640 287,760 275,880

2021 2022 2023

1,320,000 1,320,000 1,320,000
0 0 1,320,000 total
59,400 59,400 59,400 297,000
59,400 59,400 1,379,400