| Your name | Dave Dowdy, Mengting Xu, Stewart Fish |
| TU ID | 915139649 (DD), 915083951(MX), 914983343 (SF) |
| Date | 10/28/15 |
| Calculating cost of equity | | | | Cash flows of the debt |
| Market risk premium | 6% | | | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Beta | 1.3 | | | $36.81 | $36.81 | $36.81 | $36.81 | $36.81 | $36.81 | $36.81 | $36.81 | $36.81 | $511.81 |
| Risk free rate | 5.09% | | | Marekt value of debt | | $435.70 |
| Interest On Bond | 9.04% |
| Cost of equity | 12.90% |
| Calculating WACC |
| Market value of equity | $929.90 |
| Market value of debt | $435.70 |
| Total Value of E/D | $1,365.60 |
| Tax rate | 40% |
| WACC | 10.51% |
| Initial Value of Capital Investment on ACP |
| Year | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Capital Investment on ACP | $100,000,000 | $185,000,000 | $300,000,000 | $350,000,000 | $350,000,000 | $415,000,000 |
| Total Initial Value of Capital Investment | | $1,700,000,000 |
| Total Years | | 15 |
| Depreciation Per Year | | $113,333,333 |
| Factors for Projections (From Case) |
| Inflation Rate | 3% |
| Royalty Rate | 1% |
| SG&A Percent of Revenue | 4% |
| NWC % of Sales | 5% |
| For 2006: |
| SWU Price | $127 |
| Price of 1 Pound of Uranium | $43 |
| Enrichment Cost of One SWU | $21 |
| Projections on Individual Factors (Formula Based) |
| Year | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| Price of One SWU | $147.23 | $151.64 | $156.19 | $160.88 | $165.71 | $170.68 | $175.80 | $181.07 | $186.50 | $192.10 | $197.86 | $203.80 | $209.91 | $216.21 | $222.70 |
| Price of Uranium per Pound | $49.85 | $51.34 | $52.88 | $54.47 | $56.11 | $57.79 | $59.52 | $61.31 | $63.15 | $65.04 | $66.99 | $69.00 | $71.07 | $73.20 | $75.40 |
| Enrichment Cost per SWU | $24.34 | $25.08 | $25.83 | $26.60 | $27.40 | $28.22 | $29.07 | $29.94 | $30.84 | $31.76 | $32.72 | $33.70 | $34.71 | $35.75 | $36.82 |
| Calculating cash flows of ACP |
| Year | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| Units of SWU sold | | | | | | | 2,500,000 | 4,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 | 6,500,000 |
| Gross revenue | | | | | | | $368,069,519 | $682,400,887 | $1,015,260,876 | $1,045,718,702 | $1,077,090,263 | $1,109,402,971 | $1,142,685,060 | $1,176,965,612 | $1,212,274,580 | $1,248,642,818 | $1,286,102,102 | $1,324,685,165 | $1,364,425,720 | $1,405,358,492 | $1,447,519,247 |
| Net revenue | | | | | | | $364,388,823 | $675,576,879 | $1,005,108,267 | $1,035,261,515 | $1,066,319,361 | $1,098,308,941 | $1,131,258,210 | $1,165,195,956 | $1,200,151,835 | $1,236,156,390 | $1,273,241,081 | $1,311,438,314 | $1,350,781,463 | $1,391,304,907 | $1,433,044,054 |
| Cost of uranium | | | | | | | $124,621,963 | $231,049,119 | $343,749,745 | $354,062,238 | $364,684,105 | $375,624,628 | $386,893,367 | $398,500,168 | $410,455,173 | $422,768,828 | $435,451,893 | $448,515,450 | $461,970,913 | $475,830,041 | $490,104,942 |
| Cost of enrichment | | | | | | | $60,861,889 | $112,837,942 | $167,877,783 | $172,914,116 | $178,101,540 | $183,444,586 | $188,947,923 | $194,616,361 | $200,454,852 | $206,468,497 | $212,662,552 | $219,042,429 | $225,613,702 | $232,382,113 | $239,353,576 |
| Depreciation | | | | | | | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 | $113,333,333 |
| Cost of goods sold | | | | | | | $298,817,185 | $457,220,395 | $624,960,861 | $640,309,687 | $656,118,978 | $672,402,547 | $689,174,624 | $706,449,862 | $724,243,358 | $742,570,659 | $761,447,779 | $780,891,212 | $800,917,948 | $821,545,487 | $842,791,851 |
| SG&A | | | | | | | $14,575,553 | $27,023,075 | $40,204,331 | $41,410,461 | $42,652,774 | $43,932,358 | $45,250,328 | $46,607,838 | $48,006,073 | $49,446,256 | $50,929,643 | $52,457,533 | $54,031,259 | $55,652,196 | $57,321,762 |
| EBIT | | | | | | | $50,996,085 | $191,333,409 | $339,943,075 | $353,541,367 | $367,547,608 | $381,974,037 | $396,833,258 | $412,138,255 | $427,902,403 | $444,139,475 | $460,863,659 | $478,089,569 | $495,832,256 | $514,107,224 | $532,930,441 |
| Taxes | | | | | | | $20,398,434 | $76,533,363 | $135,977,230 | $141,416,547 | $147,019,043 | $152,789,615 | $158,733,303 | $164,855,302 | $171,160,961 | $177,655,790 | $184,345,464 | $191,235,828 | $198,332,903 | $205,642,890 | $213,172,176 |
| Net income | | | | | | | $30,597,651 | $114,800,045 | $203,965,845 | $212,124,820 | $220,528,565 | $229,184,422 | $238,099,955 | $247,282,953 | $256,741,442 | $266,483,685 | $276,518,196 | $286,853,742 | $297,499,354 | $308,464,334 | $319,758,264 |
| Operating cash flow | | | | | | | $143,930,984 | $228,133,379 | $317,299,178 | $325,458,154 | $333,861,898 | $342,517,755 | $351,433,288 | $360,616,287 | $370,074,775 | $379,817,018 | $389,851,529 | $400,187,075 | $410,832,687 | $421,797,668 | $433,091,598 |
| Net working capital | | | | | | $25,000,000 | $18,403,476 | $34,120,044 | $50,763,044 | $52,285,935 | $53,854,513 | $55,470,149 | $57,134,253 | $58,848,281 | $60,613,729 | $62,432,141 | $64,305,105 | $66,234,258 | $68,221,286 | $70,267,925 | $0 |
| Change in net working captial | | | | | | 0 | -$6,596,524 | $15,716,568 | $16,642,999 | $1,522,891 | $1,568,578 | $1,615,635 | $1,664,104 | $1,714,028 | $1,765,448 | $1,818,412 | $1,872,964 | $1,929,153 | $1,987,028 | $2,046,639 | -$70,267,925 |
| Net capital spending | $100,000,000 | $185,000,000 | $300,000,000 | $350,000,000 | $350,000,000 | $415,000,000 |
| Total cash flow of ACP | -$100,000,000 | -$185,000,000 | -$300,000,000 | -$350,000,000 | -$350,000,000 | -$415,000,000 | $150,527,509 | $212,416,810 | $300,656,179 | $323,935,262 | $332,293,320 | $340,902,120 | $349,769,184 | $358,902,259 | $368,309,327 | $377,998,607 | $387,978,565 | $398,257,922 | $408,845,659 | $419,751,029 | $503,359,522 |
| NPV | $639,084,481.23 |
| IRR | 11.96% |
mtxu1107
usec_inc._case_excel_file.xlsx
