Inputs Base Case

Equipment Cost ($) 7750

Salvage value, Year 4 ($) 639
Units sold, Year 1 10,000
Annual change in units sold, after Year 1 15%
Sales price per unit, Year 1 ($) 1.5
Annual change in sales price, after Year 1 4%
Variable cost per unit (VC), Year 1 ($) 1.07
Annual change in VC, after Year 1 3%
Nonvariable cost (Non-VC), Year 1 ($) 2120
Annual change in Non-VC, after Year 1 3%
Project cost of capital (WACC) 10%
Tax rate 40%
Working capital as% of next year's sales 15%

Intermediate calculations 0 1 2
Unit Sales 10000 11500
Sales price per unit 1.5 1.56
Variable cost per unit 1.07 1.10
Non-variable costs 2120 2184
Sales Revenue 15,000 17,940
Working Capital 2250 2691 3218
Capital Investment 7750
Annual depreciation rate 33.33% 44.45%
Annual depreciation expense 2,583 3,445
Remaining Depreciating Value 5167 1722

Cash Flow Forecast 0 1 2

Sales Revenue 15000 17940
Variable costs 10700 12674
Nonvariable costs 2120 2184
Depreciation 2583 3445
EBIT -403 -363
Tax -161 -145
Net operating profit after taxes -242 -218
Add back depreciation 2583 3445
Capital Investment -7750
Profit from salvage value
Cash flow due to tax on salvage value
Cash flow due to change in working capital -2250 -441 -527
Project Net Cash flows -10000 1900 2700
NPV ₹ 1,048.16
IRR 13.79%
 3 4
13225 15209
1.62 1.69
1.14 1.17
2249 2317
21,456 25,662
3849 0

14.81% 7.41%
1,148 574
574 0

3 4
21456 25662
15013 17782
2249 2317
1148 574
3047 4988
1219 1995
1828 2993
1148 574

639
-256
-631 3849
2345 7800
Inputs Base Case
Equipment Cost ($) 7750
Salvage value, Year 4 ($) 639
Units sold, Year 1 8,968 What if analysis<Goal See
Annual change in units sold, after Year 1 15%
Sales price per unit, Year 1 ($) 1.5
Annual change in sales price, after Year 1 4%
Variable cost per unit (VC), Year 1 ($) 1.07
Annual change in VC, after Year 1 3%
Nonvariable cost (Non-VC), Year 1 ($) 2120
Annual change in Non-VC, after Year 1 3%
Project cost of capital (WACC) 10%
Tax rate 40%
Working capital as% of next year's sales 15%

Intermediate calculations 0 1 2
Unit Sales 8968 10313
Sales price per unit 1.5 1.56
Variable cost per unit 1.07 1.10
Non-variable costs 2120 2184
Sales Revenue 13,452 16,089
Working Capital 2018 2413 2886
Capital Investment 7750
Annual depreciation rate 33.33% 44.45%
Annual depreciation expense 2,583 3,445
Remaining Depreciating Value 5167 1722

Cash Flow Forecast 0 1 2

Sales Revenue 13452 16089
Variable costs 9596 11366
Nonvariable costs 2120 2184
Depreciation 2583 3445
EBIT -847 -906
Tax -339 -362
Net operating profit after taxes -508 -544
Add back depreciation 2583 3445
Capital Investment -7750
Profit from salvage value
Cash flow due to tax on salvage value
Cash flow due to change in working capital -2018 -395 -473
Project Net Cash flows -9768 1680 2428
NPV ₹ -0.00
IRR 10.00%
What if analysis<Goal Seek< NPV< Units sold

3 4
11860 13640
1.62 1.69
1.14 1.17
2249 2317
19,242 23,014
3452 0

14.81% 7.41%
1,148 574
574 0

3 4
19242 23014
13464 15948
2249 2317
1148 574
2382 4175
953 1670
1429 2505
1148 574

639
-256
-566 3452
2011 6915
Deviation from base Equipment Cost
-30% 5425
0% 7750
30% 10075

Deviation from base Price

-30%
0%
30%
NPV (Eqp cost)

NPV (Price)
 Base Worst Best
Equipment Cost ($) 7750 8250 7250
Salvage value, Year 4 ($) 639 639 639
Units sold, Year 1 10,000 8500 11500
Annual change in units sold, after Year 1 15% 5% 25%
Sales price per unit, Year 1 ($) 1.5 1.25 1.75
Annual change in sales price, after Year 1 4% 4% 4%
Variable cost per unit (VC), Year 1 ($) 1.07 1.17 0.97
Annual change in VC, after Year 1 3% 3% 3%
Nonvariable cost (Non-VC), Year 1 ($) 2120 2330 1910
Annual change in Non-VC, after Year 1 3% 3% 3%
Project cost of capital (WACC) 10% 10% 10%
Tax rate 40% 50% 30%
Working capital as% of next year's sales 15% 15% 15%
Prob 0.5 0.25 0.25
NPV

Expected NPV
std dev
Coefficient of variation