Expected Life of Proposal (yrs) 10

Initial Fixed Capital Investment $ 5,00,00,000

Net Working capital Requirement $ 10,00,000
Final Resale Value $ 1,50,000
Depreciation Rate 10%
Sales at the end of 1st Year $ 1,00,00,000
Sales Growth rate 20%
$ 1,20,000 Yr 1-5
Fixed Cash Operating Expenses
$ 1,30,000 Yr 6-10
Variable Cash Operating Expenses (% of 30% Yr 1-5
Sales) 40% Yr 6-10
Marginal Tax Rate 25%
Required rate of return 10%
Working Capital Requirement (% of Sales) 20%
Year 0 1 2
Sales $ 1,00,00,000 $ 1,20,00,000
Fixed Cash Expenses $ 1,20,000 $ 1,20,000
Variable Cash Expenses $ 30,00,000 $ 36,00,000
Depreciation $ 50,00,000 $ 50,00,000
Profit after Tax $ 14,10,000 $ 24,60,000
FCF $ 64,10,000 $ 74,60,000
Fixed Capital $ -5,00,00,000
Working Capital Investment $ -10,00,000 $ -10,00,000 $ -4,00,000
Cash Flow $ -5,10,00,000 $ 54,10,000 $ 70,60,000
NPV $ -5,10,00,000 $ 49,18,182 $ 58,34,711
IRR 17%
 3 4 5 6 7 8 9
$ 1,44,00,000 $ 1,72,80,000 $ 2,07,36,000 $ 2,48,83,200 $ 2,98,59,840 $ 3,58,31,808 $ 4,29,98,170
$ 1,20,000 $ 1,20,000 $ 1,20,000 $ 1,30,000 $ 1,30,000 $ 1,30,000 $ 1,30,000
$ 43,20,000 $ 51,84,000 $ 62,20,800 $ 99,53,280 $ 1,19,43,936 $ 1,43,32,723 $ 1,71,99,268
$ 50,00,000 $ 50,00,000 $ 50,00,000 $ 50,00,000 $ 50,00,000 $ 50,00,000 $ 50,00,000
$ 37,20,000 $ 52,32,000 $ 70,46,400 $ 73,49,940 $ 95,89,428 $ 1,22,76,814 $ 1,55,01,676
$ 87,20,000 $ 1,02,32,000 $ 1,20,46,400 $ 1,23,49,940 $ 1,45,89,428 $ 1,72,76,814 $ 2,05,01,676

$ -4,80,000 $ -5,76,000 $ -6,91,200 $ -8,29,440 $ -9,95,328 $ -11,94,394 $ -14,33,272

$ 82,40,000 $ 96,56,000 $ 1,13,55,200 $ 1,15,20,500 $ 1,35,94,100 $ 1,60,82,420 $ 1,90,68,404
$ 61,90,834 $ 65,95,178 $ 70,50,686 $ 65,03,022 $ 69,75,923 $ 75,02,568 $ 80,86,865
 10
$ 5,15,97,804
$ 1,30,000
$ 2,06,39,121
$ 50,00,000
$ 1,93,71,512
$ 2,43,71,512
$ 1,12,500 $ 1,12,500.00 1
$ 85,99,634
$ 3,30,83,646
$ 1,27,55,178 $ 2,14,13,145