Build a cash flow (both write-up and spreadsheet) for a project/investment in assets based on real case/observed
Question:
Build a cash flow (both write-up and spreadsheet) for a project/investment in assets based on real case/observed case/own case. Write-up must be cut and paste to excel. The following are the requirements:
1. Please ensure the figures are as real as possible based on research. You can provide evidence of your research (if possible)
2. Initial cost/ Investment (CF0)
3. Net working capital (year 0 and recovery period only)
4. Inflation - cost analysis (VC and FC)
5. Depreciation on asset(s) - straight line to zero or straight line to salvage value method
6. Salvage Value and tax gain/loss
7. Estimation of cost of capital - Pure play method is acceptable but with evidence
8. Estimate NPV and IRR
9. Conduct NPV sensitivity analysis - Select on two variables with high uncertainty. Run sensitivity analysis one at a time and through the analysis, establish which variables are more critical and most likely affect the final decision on this project.
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta