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Group 3 CFEV 5th Assignment-Hansson-Private-Label
Group 3 CFEV 5th Assignment-Hansson-Private-Label
Production Costs:
Raw Materials Per Unit Growing at 1.0% 0.94
Manufacturing Overhead Growing at 3.0% 3,600
Maintenance Expense Growing at 3.0% 2,250
4 6 6 6 6 6 6 6 6
165.6 171.4 177.4 183.6 190.0 196.7 203.6 210.7 218.1
662.4 1,028.4 1,064.4 1,101.6 1,140.2 1,180.1 1,221.4 1,264.1 1,308.4
0.34%
Historical Ratio Analysis
2003 2004 2005 2006 2007 Assignment by GROUP 3:
Profitability Ratios 36BM05 Adarsh
Profit Margin 5.7% 6.0% 3.4% 5.7% 5.7% 36BM30 K.Abhinav
Return on Assets (ROA) 8.6% 9.4% 5.6% 9.7% 10.1% 36BM27 Khushbu
Return on Equity (ROE) 14.2% 14.9% 8.5% 14.3% 14.4% 36BM49 Shashwat
Return on Invested Capital (ROIC) 10.9% 12.0% 7.6% 12.3% 12.5% 36BM22 Harsh
Gross Margin 19.5% 20.5% 15.5% 19.3% 18.0% 36BM52 Sudhanshu
Cost of Capital (Discount Rate) 9.38% Chosen as the most appropriate discount rate from potential discount rates in WACC sh
PV of Un-Levered Free Cash Flow (45,000) (5,514) 5,588 5,775 5,982 6,164 6,299 6,573
Cumulative Free Cash Flow (45,000) (50,514) (44,926) (39,151) (33,168) (27,005) (20,705) (14,133)
NPV 12,255 Tucker Hansson should proceed with the investment as the project generates a positive N
IRR 13%
Payback Period (Break even point) 9.15