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    ACA

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    Preksha Gulati
    This document contains numerical calculations and questions related to investment analysis. It includes calculations of NPV, IRR, WACC, equity returns using CAPM, and iterative calculations to determine optimal capital structure. The key figures calculated are an NPV of ₹10,627.86, an IRR of 18.27%, a WACC of 11.2%, an equity return of 14%, and an optimal debt-to-value ratio of 0.25 through iteration.

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    ACA

    Uploaded by

    Preksha Gulati
    5 views5 pages
    This document contains numerical calculations and questions related to investment analysis. It includes calculations of NPV, IRR, WACC, equity returns using CAPM, and iterative calculations to determine optimal capital structure. The key figures calculated are an NPV of ₹10,627.86, an IRR of 18.27%, a WACC of 11.2%, an equity return of 14%, and an optimal debt-to-value ratio of 0.25 through iteration.

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    NPV Calculation

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    This document contains numerical calculations and questions related to investment analysis. It includes calculations of NPV, IRR, WACC, equity returns using CAPM, and iterative calculations to determine optimal capital structure. The key figures calculated are an NPV of ₹10,627.86, an IRR of 18.27%, a WACC of 11.2%, an equity return of 14%, and an optimal debt-to-value ratio of 0.25 through iteration.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    5 views5 pages

    ACA

    Uploaded by

    Preksha Gulati
    This document contains numerical calculations and questions related to investment analysis. It includes calculations of NPV, IRR, WACC, equity returns using CAPM, and iterative calculations to determine optimal capital structure. The key figures calculated are an NPV of ₹10,627.86, an IRR of 18.27%, a WACC of 11.2%, an equity return of 14%, and an optimal debt-to-value ratio of 0.25 through iteration.

    Copyright:

    © All Rights Reserved
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    Download as xlsx, pdf, or txt
    of 5

    Q-6

    Investment Outlay
    Salvage Value
    Tax Write-off

    Incremental cash Flows


    Depreciation
    EBIT
    EBIT (1-t)
    EBIT+ Depreciation -46500

    NPV
    IRR

    Q-7

    WACC (Vu) 0.120


    All equity cash flows 560.000
    PV 4666.667
    PV of tax shield 250.000
    4916.667

    Q-8
    WACC 11.2%
    Equity Return (Asset Beta = Equity Beta * E/V + Debt Beta * D/V) 1.333
    Debt Return = 0.06 + Debt Beta ( 0.06) = 8% 0.333
    Equity Return 14%
    PV of Cash Flows 5000

    Iteration 1
    D/V 0.25
    New Be 1=Be * 3/4 + 1/3 * 1/4
    Re 0.133333333333333
    New Wacc 0.114
    PV 4912.28070175439

    Q-9
    10
    10.5
    -0.5
    Q-10
    Method - I
    ^14 + 1.05B = 0
    ^8 + 1.05B = 2
    ^6=-2
    ^=-2/6 -0.333333333333333
    B 4.44444444444444
    Value of the option 1.11111111111111
    PV 0.611111111111111

    Method - II
    0.4
    -0.2
    =0.4*p+(1-p)*-0.2 = 0.05
    =0.4p - 0.2 + 0.2p = 0.05
    = 0.6p = 0.25
    0.416666666666667
    0.583333333333333
    4.44444444444444

    Q-11
    WW 0.0884
    LP 0.0692

    WW 0.48
    LP 0.24

    Q-12
    Ba 0.8
    D/V 0.4
    Bd 0.1
    Be =0.6*Be+0.4*0.1
    =0.6*Be+0.04
    1.26666666666667
    -80000
    30000
    3500 -46500

    1 2 3 4 5 6 7
    15000 15000 15000 15000 15000 15000 15000
    5000 5000 5000 5000 5000 5000 5000
    10000 10000 10000 10000 10000 10000 10000
    6500 6500 6500 6500 6500 6500 6500
    11500 11500 11500 11500 11500 11500 11500

    ₹10,627.86
    18.27%

    1.222222222222
    0.03536
    0.04152
    0.07688
    0.192
    0.144
    0.336
    0.07688
    8
    15000
    5000
    10000
    6500
    11500

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