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Relevant Cash Flows

The document presents financial information for three options of a business over multiple years. It includes revenues, costs, profits, cash flows, and other financial metrics. Key details include: - Revenue and cost figures for Options 1, 2 and 3 in Years 1 and 2 - Details of capacity, production volumes, prices and costs for Years 1-5 - Calculations of profits, taxes, cash flows, net present value and internal rate of return for the 5 year period.

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ktsnl
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66 views

Relevant Cash Flows

The document presents financial information for three options of a business over multiple years. It includes revenues, costs, profits, cash flows, and other financial metrics. Key details include: - Revenue and cost figures for Options 1, 2 and 3 in Years 1 and 2 - Details of capacity, production volumes, prices and costs for Years 1-5 - Calculations of profits, taxes, cash flows, net present value and internal rate of return for the 5 year period.

Uploaded by

ktsnl
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Relevant Cash Flows

Revenues
Medical Supplies
Doctor Fees
Managers Salary
Allocated Office Space Cost
Depreciation on Equipment
Miscellaneous Expenses
Administrative Overheads
Payment to House Inc.
Additional Profit
Net Cash Flow

Relevant Costs
Revenues
Medical Supplies
Doctor Fees
Managers Salary
Allocated Office Space Cost
Depreciation on Equipment
Miscellaneous Expenses
Administrative Overheads
Payment to House Inc.
Additional Profit
Net Profit before Tax

Option 1
600,000
-72,500
-25,000
-10,000
-15,000
-30,000
-360,000
87,500

Option 1
600,000
-8,000
-72,500
-25,000
-10,000
-32,500
-15,000
-30,000
-360,000
47,000

Option 2
Option 3
###
600,000
###
-217,500
-15,000
-48,000
###
-10,000
###
-10,000
###
-30,000
-100,000
-440,000
###
30,000
184,500

135,000

Option 2
Option 3
###
600,000
-32,000
-217,500
-15,000
-48,000
###
-10,000
-32,500
-10,000
###
-30,000
-100,000
-440,000
###
30,000
120,000

135,000

Year
Total Capacity
Utilized Capacity
Per Unit Selling Price and Costs (Rs.)
Selling Price
Direct Material
Direct Labor
Variable Mfg. Overheads
Fixed Mfg. Overheads
Variable Selling Expense
Fixed Selling Expense

Cost of New Equipment


Resale of Equipment Net of Tax
Working Capital
AR (Sales x Avg Coll. Period (=2/12))
Inventory (2 month DM cost)
AP (DM Cost x Avg. Pmt. Period (=1month))
Working Capital
Average Annual Sales Vol.
Annual Sales Revenue
Operating Costs
Direct Material
Direct Labor
Variable Mfg. Overheads
Fixed Mfg. Overheads
Variable Selling Expense
Fixed Selling Expense

0
-800,000
-

233,333.33
58,333
29,167
-262,500

1
100,000
70%

2
100,000
80%

3
100,000
80%

20.00
5.00
4.00
2.00
2.00
1.00
2.00

21.00
5.20
4.16
2.08
2.08
1.00
2.00

22.05
5.41
4.33
2.16
2.16
1.00
2.00

46,666.67
11,000
5,500
-52,167

14,000
2,773
1,387
-15,387

53,288
12,258
6,129
-59,417

70,000
1,400,000

80,000
1,680,000

80,000
1,764,000

-350,000
-280,000
-140,000
-140,000
-70,000
-140,000

-416,000
-332,800
-166,400
-166,400
-80,000
-160,000

-432,640
-346,112
-173,056
-173,056
-80,000
-160,000

Depreciation

-160,000

-160,000

-160,000

PBT
Tax @ 30 %
PAT

120,000
36,000
84,000

198,400
59,520
138,880

239,136
71,741
167,395

Cash Flows
Add: Depreciation

150,000

150,000

150,000

-10,000
171,833.33

-10,000
263,493.33

-10,000
247,978.63

less: Erosion
Cash Flows
NPV
IRR

-1,062,500.00
198,747.59
17.62%

4
100,000
90%

5
100,000
90%

23.15
5.62
4.50
2.25
2.25
1.00
2.00

24.31
5.85
4.68
2.34
2.34
1.00
2.00

5
-

50,000

17,364
3,375
1,687
-19,052

408,521.57

90,000
2,083,725

90,000
2,187,911

-506,189
-404,951
-202,476
-202,476
-90,000
-180,000

-526,436
-421,149
-210,575
-210,575
-90,000
-180,000

-160,000

-160,000

337,634
101,290
236,344

389,177
116,753
272,424

150,000

150,000

-10,000
357,292.21

-10,000
870,945.29

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