Urgent 1

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Week 1 Ch 2-1

Company Boomwichers NV
Period n n+1 n+2 n+3 n+4 n+5
Operating inflows 165 200 240 280 320 360
Operating outflows 165 175 180 185 180 190
Operating cash flows 0 25 60 95 140 170
Investments -200
Free cash flows -200 25 60 95 140 170
Flows to creditors -100 5 5 5 5 105 25
Flows to shareholders -100 20 55 90 135 65 265
Company Ellingham plc - Cash Forecast
Year 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016
Period Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Operating inflows 384.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0
Operating outflows 350.0 4.0 6.0 6.0 14.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0
Purchases of raw materials 136.0 8.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0
Shipping 70.0 0.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Payroll costs 144.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0
Operating cash flows 34.0 -4.0 -6.0 -6.0 -14.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Investments -30.0 -30.0
Free cash flows 4.0 -34.0 -6.0 -6.0 -14.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Flows to creditors -3.5 -18.0 0.0 0.0 0.0 0.0 1.0 2.0 0.0 0.0 0.0 0.0 0.9 2.0 0.0 0.0 0.0 0.0 0.8 2.0 0.0 0.0 0.0 0.0 0.7 2.0 0.0 0.0 0.0 0.0 0.6 2.0 0.0 0.0 0.0 0.0 0.5
Credit -8.0 -18.0 2.0 2.0 2.0 2.0 2.0
Interest 4.5 1.0 0.9 0.8 0.7 0.6 0.5
Flows to shareholders 7.5 -16.0 -6.0 -6.0 -14.0 2.0 1.0 0.0 2.0 2.0 2.0 2.0 1.1 0.0 2.0 2.0 2.0 2.0 1.2 0.0 2.0 2.0 2.0 2.0 1.3 0.0 2.0 2.0 2.0 2.0 1.4 0.0 2.0 2.0 2.0 2.0 1.5
Year Total 2014 2015 2016
Operating inflows 384.0 96.0 144.0 144.0
Operating outflows 350.0 110.0 120.0 120.0
Purchases of raw materials 40.0 48.0 48.0
Shipping 22.0 24.0 24.0
Payroll costs 48.0 48.0 48.0
Operating cash flows 34.0 -14.0 24.0 24.0
Investments -30.0 -30.0 0.0 0.0
Free cash flows 4.0 -44.0 24.0 24.0
Flows to creditors -3.5 -14.1 5.5 5.1
Credit -16.0 4.0 4.0
Interest 1.9 1.5 1.1
Flows to shareholders 7.5 -29.9 18.5 18.9

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Week 1 Ch 3-1

Exercise 1: Starjö AB
By-nature income statement By-destination income statement
Sales 340,500 Turnover 340,500
Change in finished goods and in-progress inventory 19,175
Finished goods 14,300
Associated labor costs 4,875
Production 359,675
Operating outflows 354,000 Cost of sales 339,825
Personnel expenses 90,000 Personnel expenses 85,125
Purchases of raw materials and goods for resale 267,050 Raw materials 249,700
Change in raw materials and goods for resale -3,050 Premises amortisation 5,000
Premises rental 0
EBITDA 5,675
Depreciation and amortisation 5,000
Premises amortisation 5,000
Change in impairment losses on fixed assets 0
EBIT 675 EBIT 675
Net interest and other financial charges 600
Loan interest 600
Profit before tax and non-recurring items 75 ;';
Exceptional gains 45,000
Capital gains on premises sales 45,000
Tax 15,776
Net earnings 29,299
Dividends 0
Retained earnings 29,299
Inventory Price Opening inventory Opening balance Closing inventory Closing balance Variation Sold
Finished products 1,100 14 15,400 27 29,700 13 14,300 227 340,500
Parts 5,400 8,450 3,050 Purchase 267,050
Case 50 5 250 13 650 8 400 248 12,400
Mother board 200 8 1,600 2 400 -6 -1,200 234 46,800
Processor 300 4 1,200 11 3,300 7 2,100 247 74,100
Memory 100 6 600 4 400 -2 -200 238 23,800
Graphic card 50 1 50 13 650 12 600 252 12,600
Hard disk 150 5 750 10 1,500 5 750 245 36,750
Screen 200 3 600 3 600 0 0 240 48,000
DVD combo 50 7 350 19 950 12 600 252 12,600
Number of PC Produced 240
Retail price 1,500
Labor cost 90,000
Wages 60,000
Payroll taxes 30,000
Purchase of premise 200,000
Depreciated value 185,000
Sale of premise 230,000
Length of depreciation 40
Length already depreciated 3
Capital gain 45,000
Premises rental 0
Number of months 0 12
Loan 12,000
Annual rate 5%
Number of the months of th year before reimbursement 12 0
Tax rate 35%

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Week 2 Ch 8-3

See Chapter 8, Exercise 3, page 140.

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Week 2 Ch 9-1

Exercise 1
Company 1 2 3 4 5
Sales 100.0 100.0 100.0 100.0 100.0
Production 100.0 100.0 104.0 99.0 0.0
Trading profit 23.0 24.8 0.0 0.0 0.0
Raw materials used 0.0 0.0 46.6 23.6 0.0
Other external charges 7.8 7.0 46.9 14.1
Personnel costs 9.3 11.7 21.5 24.1 88.2
EBITDA 6.8 6.7 28.1 3.7 4.6
Depreciation and amortisation 2.6 0.9 14.4 1.2 0.7
Operating income 4.2 5.8 7.1 2.9 3.1

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Week 2 Ch 10-3

Exercise 3: Schmidheiny Group
Projected 0 1 2 3
Production 70.2 106.0 132.0 161.0
Raw materials used 29.4 35.4 44.3 53.8
Personnel cost 22.2 29.4 36.7 41.1
Taxes 0.5 0.7 0.7 0.8
Other external services 13.7 19.8 24.6 30.5
Outsourcing 2.5 8.9 11.2 11.3
Depreciation and amortisation 1.4 2.7 3.6 5.0
Variable costs 38.8 54.2 67.8 80.4
Personnel costs 29.4 35.4 44.3 53.8
Taxes 2.5 8.9 11.2 11.3
Other external services (50%) 6.9 9.9 12.3 15.3
Fixed costs 31.0 42.7 53.3 62.2
Personnel costs 22.2 29.4 36.7 41.1
Taxes 0.5 0.7 0.7 0.8
Other external services (50%) 6.9 9.9 12.3 15.3
Depreciation and amortisation 1.4 2.7 3.6 5.0
Operating breakeven 69.1 87.4 109.6 124.1
Sales/Breakeven 102% 121% 120% 130%
Financial costs 1.6 4.6 4.6 4.6
Total breakeven 72.7 96.8 119.0 133.3
Sales/Breakeven 97% 110% 111% 121%

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Week 3 Ch 11-1

Exercise 1: Van de Putte Group Exercise 1
M€
Sales
Raw materials used in the business 100
Direct production costs 30
Administrative costs 40
20
Operating
Raw materials inventories
Length of production cycle 15 days Days by months
Raw materials 1 months 30
Production costs 1 months
Finished products inventories 15 days
15 days
Payments terms
Suppliers
Customers 2 months
1 months
Raw materials inventories % of sales Time taken to shift goods or payment period Value in days of sales
Work in progress 30% 15.0 4.5
Raw materials
Production costs 30% 30 9
Finished products inventories 40% 15 6
Trade receivables 90% 15 13.5
Trade payables 100% 30 30
Total -30% 60.0 -18.0
45.0
Exercise 2: Spalton plc
Permanent working capital
Sales year 1
Sales year 2
EBITDA year 2
Operating cash flow (before taxes and financial expense)
Exercise 3: Moretti Spa
Balance sheet
Inventories of finished goods
Trade and notes receivable
Trade and notes payable
Income statement
Sales (excl. VAT)
Sales (incl. VAT)
Purchases (incl. VAT)
Ratios
Working capital
Working capital turnover
Days/Receivables
Days' inventories
Days/Payables
Exercise 4
Resale rotate
Cost of goods sold
Customer pay
Suppliers paid on
Salaries paid at the end of the month
Payroll taxes
VAT 19,6
Working capital component
Accounts payable
Personnel costs
Social security contributions payable
Inventories of goods for resale
Trade receivable
VAT payable
Total
Exercise 5
Resale rotate
Supplier credit
Customer credit
Purchases in % of sales
No VAT
Working capital
Inventories of goods for resale
Trade receivables
Accounts payable
Total
Exercise 5
See answer in the book

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Week 3 Ch 12-1

Exercise 1
1 2 3 4 5
Fixed assets 100.0 110.0 120.0 130.0 140.0
Working capital 200.0 225.0 250.0 280.0 315.0
EBITDA 38.0 40.0 44.0 48.0 52.0
Depreciation and amortization 10.0 10.0 11.0 12.0 13.0
Financial expense 14.0 15.0 17.0 19.0 22.0
Income tax expense 7.0 7.5 8.0 8.0 8.5
Dividends 5.0 5.0 5.0 6.0 6.0
Cash flow statement 2 3 4 5
Cash flow 17.5 19.0 21.0 21.5
Change in working capital 25.0 25.0 30.0 35.0
Cash flow from operating activities (A) -7.5 -6.0 -9.0 -13.5
Capital expenditures (B) 20.0 21.0 22.0 23.0
Capital increase (C)
Dividends (D) 5.0 5.0 5.0 6.0
(A)-(B)+(C)-(D)=Net decrease in debt -32.5 -32.0 -36.0 -42.5

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Week 5 Ch 18-1 & 2

Exercise 1: ENI
Period Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11
Share ENI 16.93 16.57 17.37 16.86 15.20 15.19 15.69 15.67 15.83 16.19 15.50 16.34 17.30
Italian index 21896 21068 22847 21562 19543 19311 21021 19734 20505 21450 19105 20173 22050
Return ENI 2.2%
Return index 0.7%
Periodic return
ENI -2.13% 4.83% -2.94% -9.85% -0.07% 3.29% -0.13% 1.02% 2.27% -4.26% 5.42% 5.88%
Index -3.78% 8.44% -5.62% -9.36% -1.19% 8.86% -6.12% 3.91% 4.61% -10.93% 5.59% 9.30%
Total risk of ENI 4.59%
β 0.56
more detailed
0.0009836594 0.003701177 0.0019072622 0.0097923776 0.00005153 0.0025750203 0.0002612739 0.0002671148 0.0008580893 0.0051040193 0.0027152288 0.0050346562
0.001672538 0.0066193373 0.0035194861 0.0093544687 0.0002235864 0.0073049531 0.0041352666 0.0012951417 0.0018494104 0.0126350094 0.0027899575 0.0080934513
β 0.56
Standard deviation return index
7.35%
Mkt risk ENI 4.11%
Specific risk ENI 2.04%
Portion of the total risk explained by mkt risk 89.58%
Exercise 2
Return 10.0%
Standard deviation 18.0%
Objective standard dev. 14%
% of added risk-free assets 22.2%
Standard deviation 14.0%
Objective standard dev. 23%
% of risk-free assets using debt 27.8%
Standard deviation 23%

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Ambiguité sur la date du versement du 2eme paiement. Si au bout de 2 ans, alors résultat légèrement différent

Standard deviation

Expected return

Le résultat du corrigé mentionne 2 sommes qui ne semblent pas correspondre à la question (somme + coef)

E*

Week 5 Ch 19-1

Exercise 1
β Bharti Airtel 0.7
β Rio Tinto 1.1
r Rio Tinto 10.0%
r risk-free 5.0%
r Bharti Airtel 8.2%

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Ambiguité sur la date du versement du 2eme paiement. Si au bout de 2 ans, alors résultat légèrement différent

Portefeuille B,S

1 1 #REF!

σ B,S

E(r B,S)

1 1 #REF!

Ecart-type

Rentabilité attendue

Le résultat du corrigé mentionne 2 sommes qui ne semblent pas correspondre à la question (somme + coef)

Page 407: Cov(rb,rs)=…pbs*ecartype(rb)*ecartyp(rs)

Week 6 Ch 20-1

Exercise 1: Withoubones bond issue
Amount 125 MEUR
Issue price 99.731%
Date of issue 2/20/10
Settlement date 2/20/10
Maturity 7 years
Coupon 5.5%
Cash flows
Date 2/20/10 2/20/11 2/20/12 2/20/13 2/20/14 2/20/15 2/20/16 2/20/17
0 1 2 3 4 5 6 7
Cash flows -99.731% 5.500% 5.500% 5.500% 5.500% 5.500% 5.500% 105.500%
Discounted cash flows -99.731% 5.211% 4.937% 4.678% 4.432% 4.199% 3.978% 72.299%
Yield to maturity 5.547%
PV 99.733%
NPV 0%
0.00 0.05 0.09 0.13 0.17 0.20 0.23 4.79
Modified duration 5.68
0.00 0.05 0.10 0.14 0.18 0.21 0.24 5.06
Duration 6.0
6.0
As at 21 February 2011
Discounted cash flows 5.238% 4.989% 4.751% 4.525% 4.309% 78.726%
Required yield to maturity 5.0%
PV 102.5%
0 0.0498866213 0.0950221358 0.1357459083 0.1723757566 0.2052092341 4.4986128197
Modified duration 5.029
0 0.0523809524 0.0997732426 0.1425332038 0.1809945445 0.2154696958 4.7235434607
Duration 5.281
5.281

Week 6 Ch 22-1

Exercice 1
Share price 500 EUR
EPS 33.3 EUR
Payout ratio 25%
Projected EPS growth 15%
Date 0 1 2 3 3
Schedule of cash flows -500.00 9.57 11.01 12.66 665.46
Discount rate 12%
Discounted xash flows -500.00 8.55 8.78 9.01 473.66
NPV 0
Value of share (year 3) 665.46
Net EPS (year 3) 50.65
P/E ratio (year 3) 13.14

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Ambiguité sur la date du versement du 2eme paiement. Si au bout de 2 ans, alors résultat légèrement différent

Portefeuille B,S

0 0 #REF!

0 0 #REF!

Le résultat du corrigé mentionne 2 sommes qui ne semblent pas correspondre à la question (somme + coef)

Page 407: Cov(rb,rs)=…pbs*ecartype(rb)*ecartyp(rs)

Note: attention, il s'agit de le déduire des impôts et non du revenu avant impôt… (ce qui a encore moins de chance d'être voté !)

Léger écart

Chapter 25

Exercise Billabong
Capital increase
Share price before issuance 0.73
Price of share issued 0.28
a)
Subscription ratio 4.50
Value of 9 shares - 9 PSR 9 x 0.73 - 9 PSR
= =
Price of 9 shares issued + 2 PSR 9 x 0.28 + 2 PSR
PSR 0.0818
b)
Share price before issuance 0.7300
PSR 0.0818
Theoretical ex-right price 0.6482
c)
Assets before the operation
Shares Price Value
9000 0.73 6570
Transaction
- Sale
PSR Price
3888 0.08 318.1090909091
- Purchase
Shares Price Using Remaining PSR
1136 0.28 -318.08 5112 PSR 0
Assets after the operation
- Shares
Number Price Value
10136 0.65 6570.0
- Cash from the operation 0.0
Total 6570

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Ambiguité sur la date du versement du 2eme paiement. Si au bout de 2 ans, alors résultat légèrement différent

Portefeuille B,S

1 1 #REF!

1 1 #REF!

Le résultat du corrigé mentionne 2 sommes qui ne semblent pas correspondre à la question (somme + coef)

Page 407: Cov(rb,rs)=…pbs*ecartype(rb)*ecartyp(rs)

Week 7 Ch 26-1

Exercise Rawhajpoutalah Intl.
Division A B
Capital employed 1,000 1,000
Expected return 15%
Net operating income 50 300
Payout 50
a)
Market value 333.3 2,000
b)
Investment in … 0 300
Return on capital employed 5% 30%
Operating income today 50 300
Operating income with the new investment 0 90
Total 50 390
Value of the division 333 2,600
Initial value 333 2,300
Value created 0 300 300
c)
Investment in … 300 0
Return on capital employed 5% 30%
Operating income today 50 300
Operating income with the new investment 15 0
Total 65 300
Value of the division 433 2,000
Expected value 633 2,000
Value created -200 0 -200
d)
Investment in … 150 150
Return on capital employed 5% 30%
Operating income today 50 300
Operating income with the new investment 8 45
Total 58 345
Value of the division 383 2,300
Expected value 483 2,150
Value created -100 150 50

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Ambiguité sur la date du versement du 2eme paiement. Si au bout de 2 ans, alors résultat légèrement différent

Portefeuille B,S

1 1 #REF!

1 1 #REF!

Le résultat du corrigé mentionne 2 sommes qui ne semblent pas correspondre à la question (somme + coef)

Page 407: Cov(rb,rs)=…pbs*ecartype(rb)*ecartyp(rs)

Chapter 27

Exercise 1
C D
P/E ratio 10 18
Net profit 140 55
Value of the shareholders'equity 1400 990
Price (transaction) 1400 990
Net profit C 140
Net profit D 55
Synergies industrielles 27.5
New net profit 222.5
Increase in net profit 59%
Increase in number of shares 71%
Growth of the EPS -7%
Exercise 2
€m
2013
WACC 8.70%
Market cap. 1034
Operating profit 68
Tax rate 40%
Capital employed 904
Book value of shareholders' equity, group share 904
EVA -38
MVA 130

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Ambiguité sur la date du versement du 2eme paiement. Si au bout de 2 ans, alors résultat légèrement différent

Portefeuille B,S

0 0 #REF!

0 0 #REF!

Le résultat du corrigé mentionne 2 sommes qui ne semblent pas correspondre à la question (somme + coef)

Page 407: Cov(rb,rs)=…pbs*ecartype(rb)*ecartyp(rs)

Chapter 28

Exercise 1
Purchase of equipment 20.00 M EUR
Depreciation over 5 years
Setup costs 1.50 M EUR
Useful life 8 years
Residual value 0.00
Increase of working capital 2.50 M EUR
Annual increase of EBITDA 3.00 M EUR
Tax rate 40%
Cash flow schedule
Year 0 1 2 3 4 5 6 7 8
Investments -21.50 0.00
Δ EBITDA 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00
Δ Working Capital -2.50 2.50
Δ tax 0.40 0.40 0.40 0.40 0.40 -1.20 -1.20 -1.20
Cash flows -21.50 0.90 3.40 3.40 3.40 3.40 1.80 1.80 4.30
Depreciation 4.00 4.00 4.00 4.00 4.00
NPV calculation
Discount rate 10.0%
NPV -6.94
Yield to maturity calculation
IRR 0.9%
NPV 0.00
Exercise 2
Purchase of new machine
Cost 2.00 M EUR
Useful life 5 years Linear depreciation over 5 years
Residual value 0.00 M EUR
Saving on charges per year 0.80 M EUR
Sale of second-hand machine
Purchase cost (previous year) 1.50 M EUR
Useful life 5 years Linear depreciation over 5 years
Residual value 0.00 M EUR
Net book value 1.20 M EUR
Potential sale price 1.00 M EUR
Tax rate 40%
Required rate of return 12%
Cash flows schedule of the new machine in comparison with the old one
Date 0 1 2 3 4 5
Purchase of new machine -2.00 0.00
Tax credit on capital losses 0.08
Δ EBITDA 0.80 0.80 0.80 0.80 0.80
Δ tax -0.28 -0.28 -0.28 -0.28 -0.16
Sale of old machine 1.00
Cash flows to be discounted -0.92 0.52 0.52 0.52 0.52 0.64
Capital loss -0.20
Δ depreciation 0.10 0.10 0.10 0.10 0.40
NPV 1.02 M EUR
IRR 50%
Exercise 3
Period 0 1 2 3 4 5
Cash flows -100.00 110.00 -30.00 25.00 50.00 100.00
Discount rate 0%
Cumulated and discounted cash flows -100.00 10.00 -20.00 5.00 55.00 155.00
Required rate of return 10.0%
NPV 90.23
IRR 42.64%
NPV 0.00
Exercise 4
Subvention 2 M EUR
Length 10 years
Initial outlay 0.8 M EUR
Δ EBITDA -0.2 M EUR
Schedule of cash flows
date 0 1 2 3 4 5 6 7 8 9 10
subvention 2.00
investments -0.80
Δ EBITDA -0.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20
Cash flows 1.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20 -0.20
Required rate of return 10% 11% 12% 13% 14% 15%
NPV -0.03 0.02 0.07 0.11 0.16 0.20
Exercise 5
Purchase of the new machine 78,000.00
Price per unit 3.00 EUR
Tax rate 35%
Required rate of return 10%
Subcontractor offer 5.00 EUR
Nbre de pièces/an 7000
Schedule of cash flows - own production in comparison with the subcontractor offer
date 0 1 2 3 4 5 6 7 8 9 10
Investment -78,000.00
Gain sur achat extérieur 14,000.00 14,000.00 14,000.00 14,000.00 14,000.00 14,000.00 14,000.00 14,000.00 14,000.00 14,000.00
Δ Tax -2,170.00 -2,170.00 -2,170.00 -2,170.00 -2,170.00 -2,170.00 -2,170.00 -2,170.00 -2,170.00 -2,170.00
Cash flows -78,000.00 11,830.00 11,830.00 11,830.00 11,830.00 11,830.00 11,830.00 11,830.00 11,830.00 11,830.00 11,830.00
Depreciation 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00
NPV -5,309.77 -> Indeed, it depends of the number of units produced (cf. below)
Number of units/year 7000 8000 9000 10000
NPV -5,310 2,678 10,666 18,654
Exercise 6
Capital expenditure 8,400.00
Revenues
Parking 1,680.00
Garage 770.00
Petrol station 800.00
Costs
Operating 670.00
Depreciation and amortisation 280.00
Income tax expense 1,000.00
Net profits 1,300.00
Schedule of cash flows
date 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Capital expenditure -8,400.00
Net income 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00
Depreciation 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00 280.00
Cash flows -8,400.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00 1,580.00
Calculation of the accounting return of the project
Net income 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00
Net book value of the fixed assets 8,400.00 8,120.00 7,840.00 7,560.00 7,280.00 7,000.00 6,720.00 6,440.00 6,160.00 5,880.00 5,600.00 5,320.00 5,040.00 4,760.00 4,480.00 4,200.00 3,920.00 3,640.00 3,360.00 3,080.00 2,800.00 2,520.00 2,240.00 1,960.00 1,680.00 1,400.00 1,120.00 840.00 560.00 280.00
Average working capital 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Accounting return 0 15.5% 16.0% 16.6% 17.2% 17.9% 18.6% 19.3% 20.2% 21.1% 22.1% 23.2% 24.4% 25.8% 27.3% 29.0% 31.0% 33.2% 35.7% 38.7% 42.2% 46.4% 51.6% 58.0% 66.3% 77.4% 92.9% 116.1% 154.8% 232.1% 464.3%
Average of the acc. return 59.8%
Payback ratio & NPV at 10%
Discount rate 10%
Cumulated and discounted cash flows -8,400.00 -6,963.64 -5,657.85 -4,470.77 -3,391.61 -2,410.56 -1,518.69 -707.90 29.18 699.26 1,308.42 1,862.20 2,365.63 2,823.30 3,239.37 3,617.61 3,961.46 4,274.05 4,558.23 4,816.57 5,051.43 5,264.94 5,459.03 5,635.49 5,795.90 5,941.72 6,074.29 6,194.81 6,304.38 6,403.98 6,494.52
Payback ratio 7.9
NPV at 10% 6,494.52
Calculation of the IRR
IRR 18.7%
NPV -0.15
Exercise 7
Machine cost 8,000
Length of depreciation 7
Total length of depreciation 8
Capital loss 2,000
Tax credit on the capital loss 40%
Tax credit 800
Nominal value of depreciation 10,500
Length 7
Sale back of the machine 500.00
Annual production 100,000 units
Initial machine cost 0.38
direct labor cost/unit 0.14
raw material/unit 0.10
general costs/unité 0.14
Cost of the new machine 0.35
direct labor cost/unit 0.12
raw material/unit 0.09
general costs/unité 0.14
Cash flow schedule (new machine)
Δ depreciation 500.00 500.00 500.00 500.00 500.00 500.00 500.00
date 0 1 2 3 4 5 6 7 8
Sale back of the old machine 5,000.00
Purchase of the new machine -11,000.00 500.00
Savings on operating costs 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00
Δ Tax (excl. Tax credit) -1,000.00 -1,000.00 -1,000.00 -1,000.00 -1,000.00 -1,000.00 -1,000.00
Tax credit 800.00
Cash Flows -5,200.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 500.00
-3200.00 -1200.00 800.00 2800.00 4800.00 6800.00 8800.00 9300.00
Required rate of return 10%
NPV 9,970.09
Payback ratio 2.60 years
Discounted cash flows -5,200.00 1818.18 1652.89 1502.63 1366.03 1241.84 1128.95 1026.32 233.25
Cumulated and discounted cash flows -5,200.00 -3,381.82 -1,728.93 -226.30 1,139.73 2,381.57 3,510.52 4,536.84
Discunted payback ratio 3.05 years
Exercise 8
Note: Figures describing the increase in sales provided in the book were multiplied by 10 by mistake… Please find below the correct version of the exercise!
Annual sales 1,000
Sale price/unit 4.00
Cost price 3.20
Fixed costs 1.00
Required return on capital invested (before tax) 20%
Extension of payment period (days) 0 15 30 45 60
Increase in sales 0 40 60 70 75
Increase in sales
Sales 1,000 1,040 1,060 1,070 1,075
Number of units produced (in thousands) 250 260 265 268 269
Production cost 800 822 833 839 841
Operating profit 200 218 227 232 234
Δ operating profit 0 18 27 32 34
Bad debt 1.2% 2.0% 2.5% 3.0% 4.0%
Customer credit 82.19 101.34 136.93 172.29 207.43
Additional customer credit 19.15 54.74 90.10 125.24
Bad debts 12.00 20.80 26.50 32.10 43.00
Additional bad debts 8.80 5.70 5.60 10.90
Net additional profit 9.20 21.30 25.90 22.85
Required additional profit on additional investment 3.83 10.95 18.02 25.05
NPV 5.37 10.35 7.88 -2.20
Optimum extension period 30 days which would yield an increase of the NPV of € 10352.05
Increase in bad debts
Extension of payment period (days) 0 15 30 45 60
Bad debts/sales 1.20% 2.00% 4.50% 7.00% 12.00%
Sales 1,000.00 1,040.00 1,060.00 1,070.00 1,075.00
Number of units produced (in thousands) 250.00 260.00 265.00 267.50 268.75
Production cost 809.72 838.78 872.25 901.61 955.97
Operating profit 190.28 201.22 187.75 168.39 119.03
Δ operating profit 0.00 10.94 -2.53 -21.90 -71.25
Schedule of incremental and discounted cash flows
Production cost 0.00 -29.06 -62.53 -91.90 -146.25
Customer payment discounted at the date of payment 0.00 32.13 44.02 45.89 42.83
NPV 0.00 3.07 -18.52 -46.01 -103.42
Optimum extension period 15.0 days

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Ambiguité sur la date du versement du 2eme paiement. Si au bout de 2 ans, alors résultat légèrement différent

Portefeuille B,S

0 0 #REF!

0 0 #REF!

Cumulated and discounted cash flows 0 1 2 3 4 5 6 7 -5200 -3381.8181818181802 -1728.925619834708 -226.29601803155174 1139.7308926985904 2381.5735388169014 3510.5213989244567 4536.8376353858703

Years

Cumulated and discounted cash flows

NPV 0 15 30 45 60 5.3698630136986303 10.352054794520546 7.8794520547945162 -2.1979452054794599

Added days of credit

NPV

NPV 0 15 30 45 60 0 3.0704217164450256 -18.518051933697961 -46.006035988831968 -103.42393579639008

Added days of credit

NPV

Le résultat du corrigé mentionne 2 sommes qui ne semblent pas correspondre à la question (somme + coef)

Page 407: Cov(rb,rs)=…pbs*ecartype(rb)*ecartyp(rs)

Note: As the building of the parking facility lasted 1 year, the operating activity only started the second year. Thus, this annual income statement is considered as a reference for the following years of activity.

Week 7 Ch 29-1,2,3

Exercise 1
Trading price 30.2
Dividends 5 the 1st years 5
Dividends after 6
Schedule of discounted cash flows
date 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254
Cash flows -30.2 5 5 5 5 5 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6
kE 18.0%
Exercise 2
Nominal value of the debt 1,000.00
Trading price of the debt 1,037.90
Cost of debt 11.0%
Schedule of discounted cash flows
date 0 1 2 3 4 5
Cash flows -1,037.90 110.00 110 110 110 1110
Discounted cash flows
kd 10.00%
Exercise 3
Number of shares issued 1000
ke 18.0%
Ve 30,200.00
kd 10.0%
Vd 1,037.90
Tax rate 34%
k 17.62%

&"Verdana,Italique"&9&F - &A &P / &N &"Verdana,Italique"&9&D - &T

Ambiguité sur la date du versement du 2eme paiement. Si au bout de 2 ans, alors résultat légèrement différent

Portefeuille B,S

0 0 #REF!

0 0 #REF!

Le résultat du corrigé mentionne 2 sommes qui ne semblent pas correspondre à la question (somme + coef)

Page 407: Cov(rb,rs)=…pbs*ecartype(rb)*ecartyp(rs)