Euroland
Essay by 24 • April 10, 2011 • 546 Words (3 Pages) • 1,088 Views
FCF and Analysis of Proposed Projects
(all Values in Ђ millions)
Project 1 2 3 4 5 6 7 8 9
Expand Truck Fleet New Plant Expanded Plant Snack Foods Automation & Conveyer Systems Southward Expansion Eastward Expansion Artificial Sweetner Inventory Control System
Investment
Property 30.00 37.50 15.00 22.50 21.00 0.00 0.00 22.50 22.50
Working Capital 3.00 7.50 0.00 4.50 0.00 30.00 30.00 4.50 0.00
Year
0 -17.10 -45.00 -15.00 -9.00 -21.00 -30.00 -30.00 -27.00 -18.00
1 -11.85 3.00 1.88 -9.00 4.13 5.25 4.50 4.50 8.25
2 4.50 7.50 2.25 -9.00 4.13 6.00 5.25 6.00 8.25
3 5.25 8.25 2.63 4.50 4.13 6.75 6.00 6.75 7.50
4 6.00 9.00 3.00 4.50 4.13 7.50 6.75 7.50
5 6.75 9.38 3.38 6.00 4.13 8.25 7.50 7.50
6 7.50 9.75 3.75 6.75 4.13 9.00 8.25 7.50
7 10.50 10.13 2.25 7.50 4.13 9.75 9.00 7.50
8 7.50 2.25 8.25 10.50 9.75 7.50
9 7.88 2.25 9.00 11.25 10.50 7.50
10 8.25 2.25 9.75 12.00 11.25 7.50
Expected FCFC 11.55 35.64 10.89 29.25 7.91 56.25 48.75 42.75 6.00
(Undiscounted)
Payback (years) 6 6 6 7 6 5 5 5 3
Maximum Payback Accepted 4 5 5 6 4 6 6 6 4
IRR 7.8% 11.3% 11.3% 13.4% 8.7% 21.4% 18.8% 20.5% 16.2%
Minimum Acepted ROR 8.0% 10.0% 10.0% 12.0% 8.0% 12.0% 12.0% 12.0% 8.0%
Spread -0.2% 1.3% 1.3% 1.4% 0.7% 9.4% 6.8% 8.5% 8.2%
NPV (WACC 10.6%) -2.88 1.49 0.41 3.74 -1.31 17.99 13.49 13.43 1.75
NPV at Minimum ROR -0.19 2.81 0.82 1.79 0.48 14.85 10.62 10.97 2.67
10.6%
Equivalent Annuity -0.04 0.46 0.13 0.32 0.09 2.63 1.88 1.94 1.03
RANKINGS NOTE__> Effluent Treatment is considered Project #11
Ђ120M
Project Investment NPV Payback IRR EA PI
1 33 -2.88 6 7.8% -0.04 -0.087
2 45 1.49 6 11.3% 0.46 0.033
3 15 0.41 6 11.2% 0.13 0.027
4 27 3.74 7 13.4% 0.32 0.139
5 21 -1.31 6 8.7% 0.09 -0.062
6 30 17.99 5 21.4% 2.63 0.600
7 30 13.49 5 18.8% 1.88 0.450
8 27 13.43 5 20.5% 1.94 0.497
9 22.5 1.75 3 16.2% 1.03 0.078
10 60 69.45 5 27.5% 10.56 1.158
11 6 1.04 3 18.5% 0.85 0.173
OPTIMAL COMBINATION
Ђ120M
Project Investment NPV PI Total ProducedNPV
10 60 69.45 1.158 60 69.450
6 30 17.99 0.600 90 87.440
7 30 13.49 0.450 120 100.930
8 27 13.43 0.497 147
4 27 3.74 0.139 174
9 22.5 1.75 0.078 196.5
2 45 1.49 0.033 241.5
11 6 1.04 0.173 247.5
3 15 0.41 0.027 262.5
5 21 -1.31 -0.062 283.5
1 33 -2.88 -0.087 316.5
IRR Ranking
Ђ120M
Project Investment NPV IRR Total ProducedNPV
10 60 69.45 27.5% 60 69.45 69.45
6 30 17.99 21.4% 90 87.44 87.44
8 27 13.43 20.5% 117 100.87 117.44
7 30 13.49 18.8% 120 130.87
11 6 1.04 18.5%
9 22.5 1.75 16.2%
4 27 3.74 13.4%
2 45 1.49 11.3%
3 15 0.41 11.2%
5 21 -1.31 8.7%
1 33 -2.88 7.8%
Payback
Ђ120M
Project Investment NPV Payback Total
9 22.5 1.75 3 22.5
11 6 1.04 3 28.5
10 60 69.45 5 88.5
6 30 17.99 5 118.5
7 30 13.49 5
8 27 13.43 5
2 45 1.49 6
3 15 0.41 6
5 21 -1.31 6
1 33 -2.88 6
4 27 3.74 7
NPV
Ђ120M
Project Investment NPV Total ProducedNPV
10 60 69.45 60 69.45
6 30 17.99 90 87.44
7 30 13.49 120 100.93
8 27 13.43
4 27 3.74
9 22.5 1.75
2 45 1.49
11 6 1.04
3 15 0.41
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