MINI CASE - Pg. 9.

29
a)

YEAR 0 1 2 3 4 5
Fixed Assets -200 -200 400 300 225 169
WCM -100
Revenues 750 750 750 750
Operating Costs 525 525 525 525
Depriciation 100 75 56 42
PBT 125 150 169 183
tax 38 45 51 55
PAT 88 105 118 128
Net Salvage value of fixed Asset
Net Recovery of the WCM

Initial Investment(1+2) -200 -300

Operating Cash flws (10+5+7(1-t)) 188 180 174 170
Terminal cash flows(11+12)
Net cash flow (13+14+15) -200 -300 188 180 174 170

b) 0 1 2 3 4 5
Equity Funds -200
Revenues 750 750 750 750 750
operating costs 525 525 525 525 525
Depriciation 100 75 56 42
Interst on WAC 12 12 12 12
Interest on term Loan 28 26.25 19.25 12.25
PBT 85 111.75 137.75 158.75
Tax 25.5 33.525 41.325 47.625
PAT 59.5 78.225 96.425 111.125
Prefernec dividend 0 0 0 0
Net Salvage value of fixed asset
Net Salvage value of current asset
Repayment of term loan 50 50 50 50
Rdemption of prefewrnece capital
Repayment of short term bank boroowings
Retirement of trade credit

Initial Investment(1)
operarting Cash flows (9-10+4)
liquidation & retirement of cash flows
Net cash flow
 6
127

750
525
32
193
58
135
100
100

167
200
367

750
525
32
12
5.25
175.75
52.725
123.025
0
100
200
50

-100
-100