CASH FLOW ESTIMATION

Year
sales unit
selling price per unit
sales revenue
variable cost
fixed cost
Depreciation
EBIT
Tax
Net Income

2012
7200000
5
36000000
13320000
3060000
10000000
9620000
2886000
6734000

2013
7200000
5
36000000
13320000
3060000
10000000
9620000
2886000
6734000

2014
7200000
5
36000000
13320000
3060000
10000000
9620000
2886000
6734000

9620000
10000000
2886000
42000
800000
0
15892000

9620000
10000000
2886000
42000
800000
0
15892000

9620000
10000000
2886000
42000
800000
0
15892000

Interim Incremental Cashflow

EBIT
add: Depreciation
less: tax
less:opportunity cost
less: Erosion cost
Changes in Working capital
Operating Cash Flow

Net Initial Cash Outlay

cost of machine
Intial working capital required
Initial capital Outlay

50000000
1080000
51080000

Terminal year Cash flow (2016)

Final year CF
add: Gain on sale of assest
add: Working capital release
Terminal CF

15892000
2800000
1500000
20192000

Net Present Value

256420.43868

IRR
PI
MIRR
Payback period

18.42%
1.0050199773
18.32%
3.21

years

2015
7200000
5
36000000
13320000
3060000
10000000
9620000
2886000
6734000

2016
7200000
5
36000000
13320000
3060000
10000000
9620000
2886000
6734000

9620000
10000000
2886000
42000
800000
0
15892000

9620000
10000000
2886000
42000
800000
15892000

Working Note:
raw material =1.8/liter
overhead cost= 1% of sales
For fixed cost
labor cost+energy+adminstrative and selling expense

3060000

For depreciation
Machine life
resale value of machine
equipment cost

5
4000000
50000000

tax

30%

opportunity cost before tax

erosion cost after tax

60000
800000

Working capital needed every year

change in WC

1500000
0

For IRR
-51080000
15892000
15892000
15892000
15892000
20192000
18.42%
18.32%

cost of machine

wacc
0.182

IRR
MIRR

For Payback period

year
0
1
2
3
4
5

CF
-51080000
15892000
15892000
15892000
15892000
20192000
Payback period

Cumulative Cf
-51080000
-35188000
-19296000
-3404000
12488000
32680000
3.21

years