公司理財(cái)?shù)诰虐嬲n后案例Conch-Republic-Electronics

1、Conch Republic Electronics AnalysisAnalysis of Conch Republic ElectronicsDevelop a prototype$750000Sunk costMarket study$200000The new PDA:Variable cost per unit$155Fixed cost per year$4700000Price of per unit$360Necessary equipme nt$21500000Depreciati onSeve n-year MACRSSalvage value$4100000Tax rat

2、e35%Required return12%YearMACRS Perce ntageDepreciatio nSales volume114.29%:$3,072,35074000224.49%$5,265,35095000317.49%$3,760,350125000412.49%$2,685,35010500058.93%$1,919,95080000The exist ing model:Price per unit$290Variable cost per un it$120Fixed cost per year$1800000Sales volume of fall by per

3、year15000Price be lowered of per unit$255Sales volume for year 180000 Sales volume for year 260000There is no in itial outlay for NWC; and Net Worki ng Capital for thePDAs will be 20% of sales.The value of the equipment in five years will be $4.1 million.Introducing the new PDA, it causes the exitin

4、g PDA sales fall down and the price fall dow n.Therefore: sales for year 仁74000*$360-15000*$290-(80000-15000)*($290-$255)=$20015000Variable cost for year 1=74000*$155-15000*$120=$9670000Sales for year 2=95000*$360-15000*$290-(60000-15000)*($290-$255) =$28275000Variable cost for year 2=95000*$155-150

5、00*$120=$12925000Year12345Sales$20,015,000$28,275,000$45,000,000$37,800,000$28,800,000Variable cost$9,670,000$12,925,000$19,375,000$16,275,000$12,400,00 0Fixed cost$4,700,000$4,700,000$4,700,000$4,700,000$4,700,000Total cost$14,370,00 0$17,625,000$24,075,000$20,975,000$17,100,00 0Depreciati on$3,072

6、,350$5,265,350$3,760,350$2,685,350$1,919,950EBIT$2,572,650$5,384,650$17,164,650$14,139,65 0$9,780,050$900,427.5$1,884,627.$6,007,627.5$4,948,877.$3,423,017.Tax05005050$1,672,222.$3,500,022.$11,157,022.$9,190,772.$6,357,032.Net in come5050505050Net worki ng capital=sales*20%Project cash flow=Project

7、operating cash flow-Project changes in net workingcapital-project capital spe nding Operati ng cash flow=EBIT+Depreciati on-TaxesCha nge in NWC=E ndi ng NWC-Begi nningNWCYear12345Operat ing cash flow:$4,744,572.50$8,765,372.50$14,917,372.50$11,876,122.50$8,276,982.50net work ing capital$4,003,000$5,

8、655,000$9,000,000$7,560,000$5,760,000in itial NWC:$0$4,003,000$5,655,000$9,000,000$7,560,000En di ng NWC$4,003,000$5,655,000$9,000,000$7,560,000$0Cha nge in NWC$4,003,000$1,652,000$3,345,000($1,440,000)($7,560,000)NET Cash flow$741,572.50$7,113,372.50$11,572,372.50$13,316,122.5015836982.5The book va

9、lue of equipment after the depreciation=$21500000-$3,072,350 - $5,265,350-$3,760,350-$2,685,350-$1,919,950=$4796650Pretax salvage value of equipme nt=$4100000After-tax cash flow of equipme nt=$4100000+($4796650-$4100000)*35%=$4343827.5YearCash flow0($21,500,000.00)1$741,572.502$7,113,372.503$11,572,

10、372.504$13,316,122.505$20210810Parti1 What is the payback period of the project?YearCash flowRemai ningPV0 :($21,500,000.00)1$741,572.50($20,758,427.50)$662,118.302$7,113,372.50($13,645,055.00)$5,670,737.013 :$11,572,372.50($2,072,682.50)$8,236,986.174$13,316,122.50$11,243,440.00$8,462,636.585$20210

11、810$11,451,133.56Payback period=3+ ($13,316,122.50-$11,243,440.00)/ $13,316,122.50=3.16 years2. What is the profitability in dex of the project?PI= (the present value of the future cash flow)/(initial investment)PV of the future cash flow=$662,118.30+$5,670,737.01+$8,236,986.17+$8,462+$11,451,133.56

12、=$34,483,611.62Pl=$34,483,611.62 /$2150000=1.603. What is the IRR of the project?IRR is the return that makes the NPV=0.Therefore:NPV=0=-$21500000+($741,572.50/(1+IRR)A1)+($7,113,372.50 /(1+IRR)A2)+ ($11,572,372.50/(1+IRR)A3)+ ($13,316,122.50心+IRRF4) ($20210810 / (1+IRR) A5)Use the EXCEL we can get

13、the IRR=27.62%4. What is the NPV of the project?NPV=-$21500000+$662,118.30+$5,670,737.01+$8,236,986.17+$8,462,636.58 +$11,451,133.56=$12,983,611.62Part25. How sensitive is the NPV to change in the price of the new PDA?We suppose the price in crease $10, so the price will be$370 per unitTherefore:Yea

14、r12345Sales$20,755,000$29,225,000$46,250,000$38,850,000$29,600,00 0Variable cost$9,670,000$12,925,000$19,375,000$16,275,000$12,400,00 0Fixed cost$4,700,000$4,700,000$4,700,000$4,700,000$4,700,000Total cost$14,370,00 0$17,625,000$24,075,000$20,975,000$17,100,000Depreciati on$3,072,350$5,265,350$3,760

15、,350$2,685,350$1,919,950EBIT$3,312,650$6,334,650$18,414,650$15,189,650$10,580,050$1,159,427.$2,217,127.$6,445,127.5$5,316,377.$3,703,017.Tax505005050$2,153,222.$4,117,522.$11,969,522.$9,873,272.$6,877,032.Net in come5050505050Year12345Operati ng cash$5,225,57$9,382,87$15,729,87$12,558,62$8,796,982.f

16、low2.502.502.502.5050net work ing capital$4,151,00 0$5,845,00 0$9,250,000$7,770,000$5,920,000in itial NWC$0$4,151,00 0$5,845,000$9,250,000$7,770,000En di ng NWC$4,151,00 0$5,845,00 0$9,250,000$7,770,000$0Change in$4,151,00$1,694,00($1,480,000($7,770,000NWC00$3,405,000)-)$1,074,57$7,688,87$12,324,87$

17、14,038,62$16,566,98NET Cash flow2.502.502.502.502.50YearCash flowPV0($21,500,000.00)1$1,074,572.50$959,439.732$7,688,872.50$6,129,522.083$12,324,872.50$8,772,600.804$14,038,622.501$8,921,798.395$20,910,810.00：$11,865,355.17NPV二$21500000+$959,439.73+$6,129,522.08+$8,772,600.80+$8,921,798.39+$11,865,3

18、55.17=$15,148,716.18Therefore:The coefficie nt of price sen sitive= ($15,148,716.18 -$12,983,611.62)/ ($370-$360)=$216510.46From the coefficie nt of the price sen sitive, we can know that if the price in crease $1,the NPV in crease S216510.46.6. How sen sitive is the NPV to cha nge in qua ntity sold

19、 of the New PDA?We suppose the qua ntity in crease 1000 per year.Therefore:Year12345Sales$20,375,000$28,635,000$45,360,000$38,160,000$29,160,000Variable cost$9,825,000$13,080,000$19,530,000$16,430,00 0$12,555,00 0Fixed cost$4,700,000$4,700,000$4,700,000$4,700,000$4,700,000Total cost$14,525,00 0$17,7

20、80,000$24,230,000$21,130,000$17,255,000Depreciati on$3,072,350$5,265,350$3,760,350$2,685,350$1,919,950EBIT$2,777,650$5,589,650$17,369,650$14,344,65 0$9,985,050$972,177.5$1,956,377.$6,079,377.5$5,020,627.$3,494,767.Tax05005050$1,805,472.$3,633,272.$11,290,272.$9,324,022.$6,490,282.Net in come50505050

21、50Year12345Operati ng cash$4,877,82$8,898,62$15,050,62$12,009,37$8,410,232.flow2.502.502.502.5050net work ing$4,075,00$5,727,00$9,072,000$7,632,000$5,832,000capital00in itial NWC$0$4,075,000$5,727,000$9,072,000$7,632,000En di ng NWC$4,075,00 0$5,727,000$9,072,000$7,632,000$0Change in$4,075,00$1,652,00($1,440,000($7,632,000NWC00$3,345,