Question: Please help with the below spreadsheet inputs/outputs: Purpose of spreadsheet: Calculate the payback period, profitability index, net present value, and internal rate of return for
Please help with the below spreadsheet inputs/outputs:
Purpose of spreadsheet: Calculate the payback period, profitability index, net present value, and internal rate of return for the new strip mine. Should Lynch Mining take the contract and open the mine?
Specifics:
| Lynch Mining | ||||
| Input area: | ||||
| Land cost | $ 4,000,000 | |||
| Aftertax land value | $ 6,500,000 | |||
| Equipment | $ 95,000,000 | |||
| Equipment salvage | 60% | |||
| Contract sales/tons | 500,000 | |||
| Contract $/ton | $86 | |||
| Year 1 production | 620,000 | |||
| Year 2 production | 680,000 | |||
| Year 3 production | 730,000 | |||
| Year 4 production | 590,000 | |||
| Spot market $/ton | $77 | |||
| Variable cost/ton | $31 | |||
| Fixed costs | $4,100,000 | |||
| NWC percent | 5% | |||
| Reclamation costs | $2,700,000 | |||
| Charitable expense | $6,000,000 | |||
| Tax rate | 38% | |||
| Required return | 12% | |||
| Year 1 depreciation | 14.29% | |||
| Year 2 depreciation | 24.49% | |||
| Year 3 depreciation | 17.49% | |||
| Year 4 depreciation | 12.49% | |||
Area for input:
| Output area: | |||||||
| Time 0 cash flow | |||||||
| Equipment | |||||||
| Land | |||||||
| NWC | |||||||
| Total | |||||||
| Sales | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | |
| Contract | |||||||
| Spot | |||||||
| Total | |||||||
| Sales | |||||||
| VC | |||||||
| FC | |||||||
| Dep | |||||||
| EBT | |||||||
| Tax | - | - | - | - | - | ||
| NI | $ - | $ - | $ - | $ - | $ - | $ - | |
| + Dep | - | - | |||||
| OCF | $ - | $ - | $ - | $ - | $ - | $ - | |
| Beginning NWC | $ - | ||||||
| Ending NWC | |||||||
| NWC cash flow | $ - | $ - | |||||
| Total cash flow | $ - | $ - | $ - | $ - | $ - | ||
| Book value | |||||||
| Salvage | MV | $ - | |||||
| BV | |||||||
| Taxes | - | ||||||
| Salvage CF | $ - | ||||||
| Time | Cash flow | ||||||
| 0 | |||||||
| 1 | |||||||
| 2 | - | ||||||
| 3 | - | ||||||
| 4 | - | ||||||
| 5 | - | ||||||
| 6 | - | ||||||
| Profitability index | #DIV/0! | ||||||
| IRR | #NUM! | ||||||
| IRR | #NUM! | ||||||
| NPV | $ - | ||||||
THANK YOU!
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