Skandvig Terra PLC Finance Questions The WF15 solar water filter is now fully developed and tested....

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Skandvig Terra PLC Finance Questions The WF15 solar water filter is now fully developed and tested. SVT has data to help decide whether to go into production. The costs and the price of the product once production has begun are estimated in Table 1. Table 1: Estimated cost and price data for WF15 Fixed costs Variable costs $200000 per year $70 per PBS 200000 90-70 do Sell Likely price $90 per PBS 10,000] 1. Using the information in Table 1, calculate the break-even output for WF15 solar water filter (show all your working). Table 2: Net cash flow for the WF15 printing project Table 3: Discount factors Year Net cash flow (excluding capital Year Discount factor investment) 1 0.91 1 2 $2000 2 0.83 $3000 3 0.75 3 $4000 4 0.68 4 $4000 5 0.62 5 $4000 In order to produce the WF15, SVT would need to invest in machinery valued at $100,000. There would be material costs and significant operating costs, as well as time and additional labour. SVT produced a net cash flow forecast for the project (Table 1) assuming a five year life for the printers. 2. Using the information from Table 2 above, calculate the payback period and the average rate of return (ARR) for the 3D printing project (show all your working). 3. HL Only: Information from Table 2 and Table 3, calculate the net present value (NPV) for the 3D printing project (show all your working). In 2018, SVT's total sales in the home water filter industry were $5 000 000 and total market sales for the same time period were $50 000 000. 4. Calculate TS' market share in 2018 (show all your working). Skandvig Terra PLC Finance Questions The WF15 solar water filter is now fully developed and tested. SVT has data to help decide whether to go into production. The costs and the price of the product once production has begun are estimated in Table 1. Table 1: Estimated cost and price data for WF15 Fixed costs Variable costs $200000 per year $70 per PBS 200000 90-70 do Sell Likely price $90 per PBS 10,000] 1. Using the information in Table 1, calculate the break-even output for WF15 solar water filter (show all your working). Table 2: Net cash flow for the WF15 printing project Table 3: Discount factors Year Net cash flow (excluding capital Year Discount factor investment) 1 0.91 1 2 $2000 2 0.83 $3000 3 0.75 3 $4000 4 0.68 4 $4000 5 0.62 5 $4000 In order to produce the WF15, SVT would need to invest in machinery valued at $100,000. There would be material costs and significant operating costs, as well as time and additional labour. SVT produced a net cash flow forecast for the project (Table 1) assuming a five year life for the printers. 2. Using the information from Table 2 above, calculate the payback period and the average rate of return (ARR) for the 3D printing project (show all your working). 3. HL Only: Information from Table 2 and Table 3, calculate the net present value (NPV) for the 3D printing project (show all your working). In 2018, SVT's total sales in the home water filter industry were $5 000 000 and total market sales for the same time period were $50 000 000. 4. Calculate TS' market share in 2018 (show all your working).