Section A Input Data [Amounts in PKR "000"]

Building cost (=
Depreciable
basis) 12,000

Other Plant
Assets/ Fixed
Assets cost (=
Depreciable
basis) 8,000 Market value of building in at
Net Operating WC 10% Market value of other fixed as
First year sales (in units) 22,000 Tax rate
Growth rate in units sold - WACC
Sales price per unit 3.00 Inflation: growth in sales price
Variable cost per unit 2.10 Inflation: growth in VC per un
Fixed costs 8,000 Inflation: growth in fixed costs

Section B Depreciation Schedule: Based MACRS Years

1 2
Building Depreciation Rate 1.30% 2.60%
Building Depreciation 156.00 312.00
Ending Book Value[Cost - Cum. Depreciation] 11,844 11,532

Years
1 2
Other Fixed Assets Depreciaition Rate 20.00% 32.00%
Other Fixed Assets Depreciaition 1600 2560
Ending Book Value[Cost - Cum. Depreciation] 6,400 3,840

Section C Net Salvage Values at termination

Building Other Fixed
Estimated Market Value at termination 7,500.00 2,000.00
Book Value at termination 10,908.00 1,360.00
Expected Gain or Lossc (3,408.00) 640.00
Taxes paid or tax credit (1,363.20) 256.00
Net cash flow from salvaged 8,863.20 1,744.00

Section D Projected Net Cash Flows Years

Time line of annual cash flows 0 1
2022 2023
Investment Outlays at Time Zero
Building (12,000)
Equipment (8,000)
 Increase in Net Operating WC (0)

Operating Cash Flows over the Project's Life

Units sold 22,000
Sales price 3.00

Sales revenue 66,000

Variable costs 46,200
Fixed operating costs 8,000
Depreciation [building] 156
Depreciation [other fixed assets] 1,600
Oper. income before taxes (EBIT) 10,044
Taxes on operating income (40%) 4,018
Net Operating Profit After Taxes (NOPAT) 6,026
Add back depreciation 1,756
Operating cash flow 7,782
Terminal Year Cash Flows
Net Operating Working Capital[Based on Sales] 6,600 6,732.00
Increase in Cash Flow due to Operating Working Capital (6,600) (132)
Return of net operating working capitale
Net salvage value
Total termination cash flows

Net Cash Flow (Time line of cash flows) (26,600) 7,650

Section E Key Output of the Proposed Project

NPV 8,955.36
IRR 24.15%
MIRR 20.43%

Section F Sensitivity Analysis 1st YEAR VARIABLE

% Deviation WACC UNIT SALES COSTS
from NPV NPV
Base Case 8,955 8,955
-30% 8% 14,000 1.47
-15% 10% #VALUE! 17,000 #VALUE! 1.79
0% 12% #VALUE! 20,000 #VALUE! 2.10
15% 14% #VALUE! 23,000 #VALUE! 2.42
30% 16% #VALUE! 26,000 #VALUE! 2.73

Deviation NPV at Different Deviations from Base

from Sales Variable Growth Year 1 Fixed
Base Case Price Cost/Unit Rate Units Sold Cost
 -30% 0 28,129 0 0 0
-15% #VALUE! 16,465 #VALUE! #VALUE! #VALUE!
0% #VALUE! 5,166 #VALUE! #VALUE! #VALUE!
15% #VALUE! (6,497) #VALUE! #VALUE! #VALUE!
30% #VALUE! (17,796) #VALUE! #VALUE! #VALUE!

Range #VALUE! 45,925 #VALUE! #VALUE! #VALUE!

Expected NPV
1

0
-30% -15% 0% 15% 30%

-30% -15% 0% 15% 30%

 Data used in Scenario Analysis
Sale Price Units VC Growth

Market value of building in at terminal 7,500 Good 3.90 26,000.00 1.47 0.30
Market value of other fixed assets at t 2,000 Base 3.00 20,000.00 2.10 -
40.00% Bad 2.10 14,000.00 2.73 (0.30)
12.00%
nflation: growth in sales price 2.00% Change the inputs to the above to get the NPVs
nflation: growth in VC per unit 2.00% for the scenarios below and the cash flows for the
nflation: growth in fixed costs 1.00% decision tree. Change to the indicated variables,

Years Cumulative
3 4 Depreciation
2.60% 2.60%
312.00 312.00 1,092
11,220 10,908

Years Cumulative
3 4 Depreciation
19.00% 12.00%
1520 960 6,640
2,320 1,360

Total

10,607.20

Years
2 3 4
2024 2025 2026
 22,000 22,000 22,000
3.06 3.12 3.18

67,320 68,666 70,040

47,124 48,066 49,028
8,080 8,161 8,242
312 312 312
2,560 1,520 960
9,244 10,607 11,498
3,698 4,243 4,599
5,546 6,364 6,899
2,872 1,832 1,272
8,418 8,196 8,171

6,866.64 7,003.97 0.00

(135) (137) 7,004
0
10,607
10,607

8,284 8,059 25,782

GROWTH SALES FIXED

RATE % PRICE COSTS
NPV NPV Sales NPV NPV
8,955.36 8,955 Price 8,955 8,955
28,128.54 -30% 2 5,600
16,465.11 -15% #VALUE! 3 #VALUE! 6,800 #VALUE!
5,166.18 0% #VALUE! 3 #VALUE! 8,000 #VALUE!
(6,497.25) 15% #VALUE! 3 #VALUE! 9,200 #VALUE!
(17,796.19) 30% #VALUE! 4 #VALUE! 10,400 #VALUE!

WACC
 0
#VALUE!
#VALUE!
#VALUE!
#VALUE!

#VALUE!