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Financial Model - Solution

This is a solution for a case study drafted for discussion purposes. The case in the following link: http://img.chandoo.org/fm/financial-modeling-case.pdf

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Ossama Ali
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© © All Rights Reserved
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52 views

Financial Model - Solution

This is a solution for a case study drafted for discussion purposes. The case in the following link: http://img.chandoo.org/fm/financial-modeling-case.pdf

Uploaded by

Ossama Ali
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Project Evaluation Model for Design Y

(Unless otherwise specified, all financials are in USD Mn)


Asset Name
Investment Assumptions
Initial Investment
Opportunity Cost
Tenor of Investment
Salvage Value of Asset
P&L Assumptions
Staring Revenue
Growth in Revenues
Variable Expenses/ Revenue
Starting Fixed Expenses
Growth in Fixed Expenses
Tax Rate
Working Capital Assumptions
Starting workign capital
Working Capital as %age of Revenue
Valuation Assumptions
Discount rat to be taken as
Risk free rate
Beta
Expected return from market
Cost of dept
Target dept: capital ratio
Market Premium
Expected return based on CAPM
Calculations
Cash Flow because of Capex in Desgin Y
Initial Investment
less: Opportunity Cost
add: Starting working capital
First Year Investment (net)

Units
0
Desgin Y

400
100
10
20
250
10%
40%
100
5%
30%
100
40%
Direct
4%
1
10%
7%
0.50
13%

13%
400
-100
100

Salvage Value of Asset


P&L Statement for Design Y
Revenues
Less: Variable Expenses
Less: Fixed Expenses
EBITDA
Less: Depreciation
EBIT
less: tax
PAT
Cash Flow Statement because of Investment in Desgin Y
EBIT(1-t)
add: depreciation
less: increase in working capital
less: Capex
add: salvage value of asset

-400
0

Free Cash Flow for Project


Valuation
Expected return by Equity Investor
Discount Factor (WACC)
Discounted Cash Flow
Net Present Value
NPV (With formula)
IRR

-400
10%
9%
-400
78
78
12%

FY10A
1

FY11P
2

FY12P
3

FY13P
4

FY14P
5

FY15P
6

FY16P
7

100

110

121

133

146

161

177

250
100
100
50
40
10
3
10

275
110
105
60
40
20
6
20

303
121
110
71
40
31
9
31

333
133
116
84
40
44
13
44

366
146
122
98
40
58
17
58

403
161
128
114
40
74
22
74

443
177
134
132
40
92
28
92

7
40
0
0
0

14
40
-10
0
0

22
40
-11
0
0

31
40
-12
0
0

41
40
-13
0
0

52
40
-15
0
0

64
40
-16
0
0

47

44

51

59

67

77

88

43

37

40

42

45

47

50

FY17P
8

FY18P
9

FY19P
10

195

214

236

487
195
141
152
40
112
33
112

536
214
148
174
40
134
40
134

589
236
155
199
40
159
48
159

78
40
-18
0
0

94
40
-19
0
0

111
40
-21
0
20

100

114

150

52

55

66

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