Income Statement

Sales/Revenue 403,000
Less: Cost of Sales
Ops. FG stock 200,000
Add: Purchase/Manufacturing cost W1 236,160
Less: Closing FG stock W2 (64,624) 371,536
Gross Profit 31,464
Admin Exp W3 1,138
Sales & Distribution Exp W4 312
Other Exp - 1,450
Profit 30,014
Tax 9,004
Profit after Tax 21,010

Large Medium

Sales Budget
No of unit 4000 5000
SP per unit 52 25
Total Revenue 208,000 125,000

Production Budget
No of unit sales 4000 5000
Less: Op. FG stock -300 -400
Add: Clso. FG Stock 400 300
Production units 4100 4900

Material Usage Budget

Aluminium strips
Production units 4100 4900
Material Requ 2.5 1
Total Usage 10250 4900

Packaging materials
Production units 4100 4900
Material Requ 1.25 0.75
Total Usage 5125 3675

Maretial Purchase budget

Aluminium strips
Total Usage 10250 4900
Less: Op. stock
Add: Clso. Stock
Purchase
Rate
Cost

Packaging materials
Total Usage 5125 3675
Less: Op. stock
Add: Clso. Stock
Purchase

Cost
Total Material cost

Labour Budget
Production units 4100 4900
Fitters and turners 1.25 0.9
Total labour hours required 5125 4410
Rate
Total labour cost

Production units 4100 4900

Assemblers and packers 0.4 0.25
Total labour hours required 1640 1225
Rate
Total labour cost
Total Labour cost

Overhead Budget
Production units 4100 4900
Indirect Mat cost 1.2 1.2
4920 5880

Indirect Labour 1.2 1.2

4920 5880

Other variable OH
W1 Mfc cost
Op RM inventory 740
Add: RM Purchase 60910
Less: RM Closing -500
Cost of RM consumed 61150
Direct Labour 144,280
Other POH 30,730
Total Mfc Cost 236,160

W2 FG Clsoing stocck Large Medium

Add: Clso. FG Stock 400 300

Aluminium strips 3 3
Packaging materials 1 1
Fitters and turners 10 10
Assemblers and packers 6 6
Indirect Mat cost 1.2 1.2
Indirect Labour 1.2 1.2
Other variable OH 53.6 53.6
76.0 76.0

Vlaue of the stock 30,411 22,808

 W3 Admin Exp
Dept 500
Utility 150
P&S 15
Admi stff salar 355
Trans 83.5
Poff. Main 34.5
1138

W4 S& D
Sales staff salar 250
Adv 62
312

Small

3500
20
70,000 403,000

3500
-200
150
3450

3450
0.5
1725 16875

3450
0.5
1725 10525
1725 16875
-220 3 660
150 3 450
16805
3
50415

1725 10525
-80 1 80
50 1 50
10495
1
10495
60910

Opn 740
Clso 500

3450
0.8
2760 12295
10
122,950

3450
0.2
690 3555 15850
6
21,330
144,280

3450
1.2
4140 14,940

1.2
4140 14,940

850 53.6278
 30,730

Small
150

3
1
10
6
1.2
1.2
53.6
76.0

11,404 64,624
Project X
Year 0 1 2 3
Initial Investment (2,500,000)

Cash Inflow 2,100,000 2,163,000 2,249,520

Cash Outflow
Materials (350,000) (360,500) (374,920)
Labour (250,000) (257,500) (267,800)
OH (200,000) (206,000) (214,240)
(800,000) (824,000) (856,960)
Net Cash Flow 1,300,000 1,339,000 1,392,560
Tax (312,000) (321,360) (334,214)
Net Cash Flow after tax 988,000 1,017,640 1,058,346

a)
Cum. CF (2,500,000) (1,512,000) (494,360) 563,986
2 Year 6.65

PBP 2 years and 1 month

b) NPV

Year 0 1 2 3
Investment (2,500,000)
CF 988,000 1,017,640 1,058,346
DF@15% 1 0.8696 0.7562 0.6576
PV (2,500,000) 859,165 769,539 695,968
NPV (175,328)

c)
Year 0 1 2 3
Investment (2,500,000)
CF 988,000 1,017,640 1,058,346
DF@8% 1 0.9259 0.8573 0.7938
PV (2,500,000) 914,789 872,423 840,115
NPV 127,327

IRR LR + NPV HR x (HR-LR)

NPVLR+NPVHR

8 175328 x (15-8)
127327+175328
 8 0.57929986288 x (15-8)
302655

4.05509904016

12%

ARR Avg Profit / Avg. Investment

1 2 3
Net Cash Flow 1,300,000 1,339,000 1,392,560
Depreciation 2,500,000 500,000 (500,000) (500,000) (500,000)
Profit 800,000 839,000 892,560
Avg Profit 843,853
Avg. Inv (Inv. + SV)/2 1,250,000

ARR 67.51

c) X Y Z
Inv 2,500,000 1,750,000 1,350,000 5,600,000
PV 2,324,672 1,743,504 2,570,000
PI 0.93 1.00 1.90
Rank 3 2 1

Project Z 1,350,000
Project Y 1,750,000
3,100,000
Project X 900,000
Project Y
Year 0 1 2 3
Initial Investment (1,750,000)

Cash Inflow 1,800,000 1,854,000 1,928,160

Cash Outflow
Materials (185,000) (190,550) (198,172)
Labour (540,000) (556,200) (578,448)
OH (100,000) (103,000) (107,120)
(825,000) (849,750) (883,740)
Net Cash Flow 975,000 1,004,250 1,044,420
Tax (234,000) (241,020) (250,661)
Net Cash Flow after tax 741,000 763,230 793,759

Cum. CF (1,750,000) (1,009,000) (245,770) 547,989

2 Year 8.62

PBP 2 years and 1 month

Year 0 1 2 3
Investment (1,750,000)
CF 741,000 763,230 793,759
DF@15% 1 0.8696 0.7562 0.6576
PV (1,750,000) 644,374 577,155 521,976
NPV (6,496)

Year 0 1 2 3
Investment (1,750,000)
CF 741,000 763,230 793,759
DF@8% 1 0.9259 0.8573 0.7938
PV (1,750,000) 686,092 654,317 630,086
NPV 220,495

IRR LR + NPV HR x (HR-LR)

NPVLR+NPVHR

8 6496 x (15-8)
220495+6496
 8 0.02861787472 x (15-8)
226991

0.20032512302

8%

1 2 3
Net Cash Flow 975,000 1,004,250 1,044,420
Depreciation 1,750,000 350,000 (350,000) (350,000) (350,000)
Profit 625,000 654,250 694,420
Avg Profit 657,890
Avg. Inv (Inv. + SV)/2 875,000

ARR 75.19

4,000,000
Working 1 2 3
Net Cash Flow 1,300,000 1,339,000 1,392,560
CA 20% 260000 267800 278512
1,040,000 1,071,200 1,114,048
Tax@30% 312000 321360 334214.4

Working
Net Cash Flow 975,000 1,004,250 1,044,420
CA 20% 195000 200850 208884
780,000 803,400 835,536
Tax@30% 234000 241020 250660.8
a) Ke Rf + b(Rm-Rf)
0.04 1.5 0.12-0.04
0.04 1.5 0.12-0.04
0.04 0.12
16%

Kp Annual dividend (D) 0.12 14%

Mkt Value 0.85

KD Annual Interest 20000*15% 3000 15%

Mkt value of the loan 20000 20000
1-0.20

12%

Kd Annual Interest 20 13%

Mkt value of the bond 150
1-0.20

11%

WACC
MV W Cost Avg.
Ordinary shares 62,500 0.48 16% 8%
Prep. Shares 25,500 0.20 14% 3%
Loan 20,000 0.15 12% 2%
Bonds 22,500 0.17 11% 2%
130,500 1.00 14%
(Before tax)

After tax (1-tax)

(Before tax)

After tax (1-tax)

After tax
 BBB
Unit 420

Selling Price 1,600

Less: VC
Materials 430
Labour 40% 88
Variable Overhead 110
628

Contribution 972

Total Sales 672000

Total Contribution 408240

WACMR Total Contribution / Total Sales

1172060
1924000

61%

MoS Expected Sales - BEP Sales

400 -217
183

Expected Sales - BEP Sales

Expected Sales

46%

Profit SPx - VCx - TFC

15000 600sp 716*600

SPx VCx
150000 = 600sp - (716*600) - (57600+(55000x30

150000 = 600sp - 429600 - 74100

150000+429600+74100 = 600sp

653700 = 600sp

653700/600 Sp
1089.5 SP
 DDD ZZZ
400 380 1200 400

1,800 1,400

500 360
96 76
120 95
716 531

1,084 869 975

720000 532000 1924000

433600 330220 1172060

Contribution / Total Sales

BEP Unit

ales - BEP Sales BBB

FC 60% 132
Sales 420
TTL F Lb C 55440
ales - BEP Sales x100 GFC

57600+(55000*30%)
*600) - (57600+(55000x30%)

600 - 74100
Fixed Cost
Cont. per unit

DDD ZZZ
144 114
400 380
57600 43320 156360
55000
211360

211360
975

217