Purchase of 10,000 acres
n (years) F P(n=0)
0 $ 5,750,000 $ 5,750,000
1 $ 4,312,500 $ 4,055,770
2 $ 3,234,375 $ 2,860,742
3 $ 2,425,781 $ 2,017,828
4 $ 1,819,336 $ 1,423,278
5 $ 1,364,502 $ 1,003,911
Bond issue $ 6,500,000.00 INTEREST RATE (i)
n 0 6.33%
OPTION 1
Raise in funds
n F P(n=0)
1 $ 6,681,516 $ 6,283,755
2 $ 6,681,516 $ 5,909,672
Cash flow
n=0 $ - Solved using "Buscar objetivo"
OPTION 2
Raise in funds if F equals
n F P(n=0)
4 $ 1,814,087 $ 1,419,171
5 $ 1,814,087 $ 1,334,686
6 $ 1,814,087 $ 1,255,230
Funds from TPL n=0 $ 8,184,340.34
Cash flow 0.00E+00 Solved using "Buscar objetivo"
Development
n F P(n=0)
4 $ 500,000 $ 391,153
5 $ 725,000 $ 533,407
6 $ 950,000 $ 657,338
NTEREST RATE (i)
per year
OPTION 1
The missing amount to financiate the project if funds are raised in
Answer years 1 and 2 is $6 681 516 each year
OPTION 2
Raise in funds if P equals
n F P(n=0)
4 1708234.3619069 1336362.2472125
5 1816365.5970156 1336362.2472125
6 1931341.5393066 1336362.2472125
Funds from TPL n=0 $ 8,184,340.34
Cash flow 0.00E+00 Solved using "Buscar objetivo"
Table 1: Data on expected sales, sales price, and varia
Year
Expected sales (million units/yr.)
Expected sales price (DKK/unit)
Expected variable costs (DKK/unit)
Profitability (DKK/unit)
Profitability (DKK/yr.)
Profitability (DKK/yr.) n=0
Table 2:Estimated
year
Expected sales (million units/yr.)
Profitability (DKK/yr.)
Profitability (DKK/yr.) n=0
Table 3: Data on expected
Year
Expected sales (million units/yr.)
Expected sales price (DKK/unit)
Expected variable costs (DKK/unit)
Profitability (DKK/unit)
Profitability (DKK/yr.)
Profitability (DKK/yr.) n=0
Table 4: Investments required for the development of the revised pro
Operation
Vision system for production monitoring
Marketing costs
Develop the production systems
Product development
Total
Point 1: Profitable for Coloplast to implement the project to rev
OLD PRODUCT
Total profitability (PKK) n=0
NEW + OLD PRODUCT
Total profitability (PKK) n=0
Point 2: Reduction in sales
Table 5:
Year
Expected sales (million units/yr.)
Expected sales price (DKK/unit)
Expected variable costs (DKK/unit)
Profitability (DKK/unit)
Profitability (DKK/yr.)
Profitability (DKK/yr.) n=0
NEW + OLD PRODUCT
Total profitability (PKK) n=0
NEW+OLD PRODUCT - OLD PRODUCT
Point 3: New + old product Without sales at
Total profitability (PKK)*
s, sales price, and variable costs for the current product, if the revised version of the product is not developed and marke
1 2 3 4
62.6 64.5 65.8 67.1
$ 16.75 $ 16.58 $ 16.42 $ 16.25
$ 2.04 $ 1.98 $ 1.92 $ 1.88
$ 14.71 $ 14.60 $ 14.50 $ 14.37
$ 920,846,000 $ 941,700,000 $ 954,100,000 $ 964,227,000
$ 837,132,727.27 $ 778,264,462.81 $ 716,829,451.54 $ 658,580,015.03
Table 2:Estimated sales for the current product, if the revised version is marketed.
1 2 3 4
49.1 19.7 9.8 0
$ 722,261,000.00 $ 287,620,000.00 $ 142,100,000.00 $ -
$ 656,600,909.09 $ 237,702,479.34 $ 106,761,833.21 $ -
ble 3: Data on expected sales, sales price, and variable costs for the revised version of the product.
1 2 3 4
14.2 47.5 58.8 71.1
$ 16.75 $ 16.58 $ 16.42 $ 16.25
$ 2.14 $ 1.89 $ 1.76 $ 1.72
$ 14.61 $ 14.69 $ 14.66 $ 14.53
$ 207,462,000 $ 697,775,000 $ 862,008,000 $ 1,033,083,000
$ 188,601,818 $ 576,673,554 $ 647,639,369 $ 705,609,590
pment of the revised product.
Cost (DKK) INTEREST RATE (i)
$ 5,000,000.00 10% per year
$ 1,000,000.00
$ 5,000,000.00
$ 3,000,000.00
$ 14,000,000.00
ent the project to revise the current product
$ 4,108,169,536 Developing and marketing the re
Answer
profitable than keeping just the ol
CT
$ 4,407,821,821
uction in sales
Table 5: Reduced sales and profitability of the revised product
1 2 3 4
12.9561048800818 43.3390832256258 53.6492230245641 64.8717645756209
$ 16.75 $ 16.58 $ 16.42 $ 16.25
$ 2.14 $ 1.89 $ 1.76 $ 1.72
$ 14.61 $ 14.69 $ 14.66 $ 14.53
$ 189,288,692 $ 636,651,133 $ 786,497,610 $ 942,586,739
$ 172,080,629 $ 526,157,961 $ 590,907,295 $ 643,799,426
CT The maximum reduction in sales t
Answer
$ 4,108,169,536 development is no long
$ - Solved using "Buscar objetivo"
ct Without sales at year 6
$ 3,776,748,998.33 If the lifespan of the revised produc
Answer profitability is less than the obtained
so the project is no long
not developed and marketed.
5 6
67.1 65.7
$ 16.09 $ 15.93
$ 1.84 $ 1.81
$ 14.25 $ 14.12
$ 956,175,000 $ 927,684,000
$ 593,709,446.08 $ 523,653,433.33
5 6
0 0
$ - $ -
$ - $ -
t.
5 6
74.7 78.4
$ 16.09 $ 15.93
$ 1.62 $ 1.67
$ 14.47 $ 14.26
$ 1,080,909,000 $ 1,117,984,000
$ 671,159,446 $ 631,072,822
loping and marketing the revised product is more
ble than keeping just the old product in the market.
% Reducted sales 8.76%
5 6
68.1564108832473 71.5322973660855
$ 16.09 $ 15.93
$ 1.62 $ 1.67
$ 14.47 $ 14.26
$ 986,223,265 $ 1,020,050,560
$ 612,367,055 $ 575,791,949
ximum reduction in sales that the revised product can experience before its
development is no longer profitable is approximately 8,76%
span of the revised product decreases to 5 years, the
ity is less than the obtained with just the old product,
so the project is no longer profitable.
