Homework Answers
| Year | Cash flow project 3 | PVF 10% | PV CF | Cumm. Cash flow |
| Year 0 | -156750 | 1.000 | -156750.00 | -156750 |
| Year 1 | 94500 | 0.909 | 85909.09 | -62250 |
| Year 2 | 125000 | 0.826 | 103305.79 | 62750 |
| Year 3 | 129650 | 0.751 | 97407.96 | 192400 |
| Year 4 | 202500 | 0.683 | 138310.22 | 394900 |
| Year 5 | 250555 | 0.621 | 155574.94 | 645455 |
| Year 6 | 175500 | 0.564 | 99065.17 | 820955 |
| Year 7 | 135000 | 0.513 | 69276.35 | 955955 |
| NPV 10% | 592099.53 | |||
| BEP(Units) | FC/ (SP-VC) | |||
| Fixed Cost- 146000 | Yearly BE | =146000/(175-88) | 1,678.16 | |
| Price- 175 | Monthly BE | =(146000/12)/87 | 139.85 | |
| VC- 88 | Daily BE | =(146000/365)/87 | 4.60 | |
| Assumed that fixed costs are applied evenly throughout the year | ||||
| Cash flow turns positive during second year | ||||
| Payback period on Normal CF | 1.498 | =1+(62250/125000) years | ||
| PVF calculated as follows | ||||
| Year 1 | Year 2 | Year 3 | Year N | |
| 1/(1+r) | 1/(1+r)^2 | 1/(1+r)^3 | 1/(1+r)^N | |
| Year | Cash flow project 4 | PVF 6% | PV CF | Cumm. Cash flow |
| Year 0 | -310500 | 1.000 | -310500.00 | -310500 |
| Year 1 | 52500 | 0.943 | 49528.30 | -258000 |
| Year 2 | 68000 | 0.890 | 60519.76 | -190000 |
| Year 3 | 80500 | 0.840 | 67589.35 | -109500 |
| Year 4 | 71000 | 0.792 | 56238.65 | -38500 |
| Year 5 | 63500 | 0.747 | 47450.89 | 25000 |
| Year 6 | 51250 | 0.705 | 36129.23 | 76250 |
| NPV 6% | 6956.18 | |||
| Cash flow turns positive during Fifth year | ||||
| Payback period on Normal CF | 4.61 | =4+(38500/63500) years | ||
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