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|
1 |
2000 |
1666.666667 |
|
2 |
3000 |
2083.333333 |
|
3 |
3000 |
1736.111111 |
|
4 |
4000 |
1929.012346 |
|
5 |
4000 |
1607.510288 |
|
6 |
4000 |
1339.591907 |
|
7 |
4000 |
1116.326589 |
|
11478.55224 |
Sensitivity Analysis
The
sales of the 1/16 DIN controller are assumed to be strong. However, since this
is a new-product introduction, there is a high probability that actual demand
will vary from the initial projections.
|
Sensitivity |
|||||
|
Worst |
Most likely |
||||
|
1 |
500 |
416.666667 |
1 |
2000 |
1666.666667 |
|
2 |
1000 |
694.444444 |
2 |
3000 |
2083.333333 |
|
3 |
1500 |
868.055556 |
3 |
3000 |
1736.111111 |
|
4 |
2000 |
964.506173 |
4 |
4000 |
1929.012346 |
|
5 |
2000 |
803.755144 |
5 |
4000 |
1607.510288 |
|
6 |
2000 |
669.795953 |
6 |
4000 |
1339.591907 |
|
7 |
200 |
55.8163294 |
7 |
4000 |
1116.326589 |
|
4473.04027 |
11478.55224 |
Further
Analysis
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
Year 7 |
|
|
Total
revenue |
$2,000
|
3000 |
3000 |
4000 |
4000 |
4000 |
4000 |
|
Cost
of Goods Sold |
115,000
|
115,000
|
115,000
|
115,000
|
115,000
|
115,000
|
115,000
|
|
Gross
profit |
(113,000) |
-112000 |
-112000 |
-111000 |
-111000 |
(111,000) |
(111,000) |
|
Selling
& administrative expenses |
0
|
0 |
0 |
0 |
0 |
0 |
0 |
|
Earnings
before interest, taxes, depr. & amort. (EBITDA) |
(113,000) |
33660000 |
-112000 |
-111000 |
-111000 |
-111000 |
-111000 |
|
Depreciation
|
500,000
|
1000000 |
1500000 |
2000000 |
2500000 |
2500000 |
2500000 |
|
Earnings
before Interest and taxes (EBIT) |
(613,000) |
32660000 |
-1612000 |
-2111000 |
-2611000 |
-2611000 |
-2611000 |
|
Taxes (39%) |
(239,070) |
12,737,400
|
(628,680) |
(823,290) |
(1,018,290) |
(1,018,290) |
(1,018,290) |
|
Net
Operating Profit After-Tax (NOPAT) |
(373,930) |
19922600 |
(983,320) |
-1287710 |
-1592710 |
-1592710 |
-1592710 |
|
Add
back depreciation |
500,000
|
1000000 |
1500000 |
2000000 |
2500000 |
2500000 |
2500000 |
|
Subtract
Capital Expenditures |
10,000,000
|
10000000 |
10000000 |
10000000 |
10000000 |
10000000 |
10000000 |
|
|
|
|
|
|
|||
|
Free
Cash Flow |
($9,873,930) |
10922600 |
-9483320 |
-9287710 |
-9092710 |
-9092710 |
-9092710 |
|
Change
in working capital |
|||||||
|
PV |
-9403742.857 |
20804952.4 |
-27095200 |
-35381752.4 |
-34638895.2 |
-34638895.24 |
-34638895.2 |
|
NPV |
($34,638,895) |
References of past history of the most similar 1/4 DIN controller
Atrill, P. (2014). Financial Management for
Decision Makers (7 ed.). Pearson Higher Ed.
Christoffersen, P. (2011). Elements of Financial Risk
Management. Academic Press.
Melville, A. (2017). International Financial Reporting: A
Practical Guide (6 ed.). Pearson Higher Ed.
Pandey, I. (2015). Financial Management. Vikas
Publishing House.
| Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 |
| 3000 | 3000 | 4000 | 4000 | 4000 | 4000 |
| 115,000 | 115,000 | 115,000 | 115,000 | 115,000 | 115,000 |
| -112000 | -112000 | -111000 | -111000 | (111,000) | (111,000) |
| 0 | 0 | 0 | 0 | 0 | 0 |
| 33660000 | -112000 | -111000 | -111000 | -111000 | -111000 |
| 1000000 | 1500000 | 2000000 | 2500000 | 2500000 | 2500000 |
| 32660000 | -1612000 | -2111000 | -2611000 | -2611000 | -2611000 |
| 12,737,400 | (628,680) | (823,290) | (1,018,290) | (1,018,290) | (1,018,290) |
| 19922600 | (983,320) | -1287710 | -1592710 | -1592710 | -1592710 |
| 1000000 | 1500000 | 2000000 | 2500000 | 2500000 | 2500000 |
| 10000000 | 10000000 | 10000000 | 10000000 | 10000000 | 10000000 |
| 10922600 | -9483320 | -9287710 | -9092710 | -9092710 | -9092710 |
| 20804952.4 | -27095200 | -35381752.4 | -34638895.2 | -34638895.24 | -34638895.2 |
| Sensitivity | |||||
| Worst | Most likely | ||||
| 1 | 500 | 416.666667 | 1 | 2000 | 1666.666667 |
| 2 | 1000 | 694.444444 | 2 | 3000 | 2083.333333 |
| 3 | 1500 | 868.055556 | 3 | 3000 | 1736.111111 |
| 4 | 2000 | 964.506173 | 4 | 4000 | 1929.012346 |
| 5 | 2000 | 803.755144 | 5 | 4000 | 1607.510288 |
| 6 | 2000 | 669.795953 | 6 | 4000 | 1339.591907 |
| 7 | 200 | 55.8163294 | 7 | 4000 | 1116.326589 |
| 4473.04027 | 11478.55224 | ||||
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