Franchise - Car
Franchise - Car
Franchise - Car
Evaluate the proposal to run this business for 5 years by Cash Flow Calculations
investing 50% in the business
Operating Cash Flows/Net Profit
Initial Investment
Initial Funding Amount Debt amount raised / (repaid)
At the end of 5 years deposit
Debt Raised 10,700,000 amount would be returned
Equity Raised 10,700,000 Total Cash Flows
IRR
Debt %
Number of Units Commission Commission
Price
Sold / month (%) (Rs.)
1 3,000,000 4% 120,000
12 2,200,000 4% 1,056,000
1 2,000,000 4% 80,000
10 1,200,000 3% 360,000
50 1,000,000 3% 1,500,000
50 700,000 3% 875,000
3,991,000
3,991,000
(FCFE) 2 3 4 5
Year- 0 Year - 1 Year - 2 Year - 3 Year - 4 Year - 5
- (714,800) 2,036,333 4,787,381 7,813,534 11,142,303
(10,700,000) - - - - -
- - - - - (10,700,000)
18,900,000
- - - - -
-10700000 -714800 2036333 4787381 7813534 19342303
30.23% Accept the Project
Interest Rate %
30% 10% 11% 12% 13% 14%
20%
25%
30%
35%
40%
45%
50%
55%
60%
NPV
Investment Option 1
PV 1010505.98878616
Cash O/F -1000000
NPV 10506 Manual Method
NPV 10506 Excel Method
IRR
Investment Option 1
IRR 10.39%
NPV 0.00%
PV
Investment Option 2
PV 599822.4
Cash O/F -600000
NPV -178 Manual Method
NPV -178 Excel Method
Investment Option 2
IRR 9.99%
NPV $0.00
Income Statement
Particulars Amt
Revenue from Operations 41600
- COGS (WN1) -21200
= Gross Profit 20400
- Tax -3000
= PAT/NI/NP 5400
WN1 Method
Particulars Amt Cost
Purchase 22600 Depn Rate
Hire of Machinery 500 Depn Amt
Prod Wages 400
Depn 300
Op Inv 13000
Cl Inv -15600
Total 21200
WN2 Method
Particulars O&A S&D Cost
Admin Cost 5000 Depn Rate
Distribution Cost 6000 Depn Amt
Depn MV 125 125
iree Debt 600
Total 5725 6125
SLM
3000
10%
300
SLM
1000
25%
250
Balance Sheet
Total 1167520
Equity 707520
-Share Capital 400000
-Share Premium 15000
-Retained Earning WN2 292520
Total 1167520
WN 1 PPE
Particular P&M LF
Cost 150000 400000
Acc Depn -60000 -152000
Op BV 90000 248000
Purchase 20000 0
Disposal -25600 0
Adj Op BV 84400 248000
20000
-25600
332400
Loss on Disposal 9
Finance Cost 14 Cl Bal
Cash Flow before WC changes 278
Total
Working Capital Changes -4
-Inventories -2
-Trade Rec -8
-Trade Pay 6
Cash Flow after WC changes 274
97 Total 97
WN2 PPE
Dr Cr
Particular Amt Particular Amt
Op Bal 668 Depn 59
Purchases 45 Disposal 15
CL Bal 639
Total 713 Total 713
Total 19 Total 19