What is the NPV, IRR, Payback Period and growth in EPS? Assumptions Annual Output (metric tons) 250,000

What is the NPV, IRR, Payback Period and growth in EPS?

 

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Assumptions Annual Output (metric tons) 250,000 Output Gain Per Year Prior Year 2.0% Discount Rate Maximum Possible Output 267,500 Price/Ton (pounds sterling) 675 Tax Rate Inflation (prices and costs) Gross Margin Growth Rate/Year Maximum Possible Gross Margin Gross Margin Investment Outlay (millions) 0.0% Depreciable Life (years) Overhead Investment Salvage Vale 0.50% WIP Inventory/Cost of Goods Sold 15.0% 11.5% Terminal Value of Right-of-Way Months Downtime, Construction 2008 30.0% 2009 Now 3.5 2010 2008 5 2011 2009 1 2010 1 10.0% 15 0.0% 0 3.0% 40 0 1 2 3 Year Now 2008 2009 2010 1. Estimate of Incremental Gross Profit New Output (tons) New Sales (Millions) New Gross Margin New Gross Profit Old Output 255,000 260,100 265,302 267,500 Lost Output Construction (106,250) (86,700) (66,326) 100.41 117.05 134.31 11.5% 11.55 12.0% 12.5% 14.05 16.79 250,000 250,000 250,000 250,000 Old Sales 168.75 168.75 Old Gross Profit 19.41 19.41 168.75 19.41 Incremental Gross Profit (7.86) (5.36) (2.62) 2. Estimate of Incremental Depreciation Yr. 1 Outlays 0.67 0.58 0.50 Yr. 2 Outlays 0.14 0.12 Yr. 3 Outlays 0.15 Total, New Depreciation 0.67 0.72 0.78 3. Overhead 0 0 0 4. Pretax Incremental Profit (8.53) (6.08) (3.39) 5. Tax Expense (256) (1.82) (1.02) 6. Aftertax Profit (5.97) (4.26) (238) 7. Cash Flow Adjustments Add Back Depreciation 0.67 0.72 0.78 Less Added WIP Inventory 1.81 (0.42) (0.44) ''ཟླ ིི ཙྪཱཙྪནྟི ཧྰུྃཊྛུཎྜ, ཨྰཿ ཏཱ ཙིཏྟི 6 2011 2012 2013 7 2014 8 9 10 11 12 13 14 15 2015 2016 2017 2018 2019 2020 2021 2022 267,500 267,500 267,500 267,500 267,500 267,500 267,500 267,500 267,500 267,500 267,500 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 13.0% 13.5% 14.0% 23.47 24.38 25.28 14.5% 26.18 15.0% 27.08 15.0% 27.08 15.0% 27.08 15.0% 27.08 15.0% 15.0% 15.0% 15.0% 27.08 27.08 27.08 27.08 250,000 250,000 168.75 250,000 168.75 168.75 168.75 250,000 250,000 250,000 250,000 250,000 250,000 168.75 168.75 168.75 168.75 168.75 168.75 250,000 250,000 168.75 168.75 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 4.07 4.97 5.87 6.78 7.68 7.68 7.68 7.68 7.68 7.68 7.68 7.68 0.43 0.38 0.33 0.28 0.24 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.10 0.09 0.08 0.07 0.06 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.13 0.11 0.09 0.08 0.07 0.06 0.05 0.05 0.05 0.05 0.05 0.05 0.67 0.58 0.50 0.43 0.37 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0 0 0 0 0 0 0 0 0 0 0 0 3.40 4.39 5.38 6.35 7.31 7.35 7.35 7.35 7.35 7.35 7.35 7.35 1.02 1.32 1.61 1.90 2.19 2.20 2.21 2.21 221 2.21 2.21 2.21 3.08 3.76 444 5.12 5.14 5.15 5.15 5.15 5.15 5.15 5.15 0.67 0.58 0.50 0.43 0.37 0.33 0.33 0.33 0.33 0.33 0.33 0.33 Recovery of added W (1.19) 0.03 0.03 0.03 0.03 0.12 Less Capital Spending (3.50) (5.00) (1.00) (1.00) 40.0 Temmal Value, Land 8. Free Cash Flow (3.50) (8.49) (4.96) (3.03) 1.86 3.68 4.29 4.90 5.51 5.47 5.47 5:47 5.47 5.47 5.47 45.60 DCF, Rotterdam= 15.50 IRR, Rotterdam= 18.0% 9. Adjustment for Erosion in Merseyside Volume: 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 136 1.36 1.36 1.36 1.36 136 1.36 136 136 1.36 1.36 1.36 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) Lost Merseyside Output Lost Merseyside Revenue Lost Merseyside Gross Profits Lost Gross Profits After Taxes Change in Merseyside Inventory Total Effect on Free Cash Flow DCF, Erosion Merseyside 3.05 Cash Flows After Erosion (3.50) (8.49) (4.96) (3.03) 26 1.26 3.08 8 DCF, Rotterdam Adjusted for Full Erosion at Merseyside = 12.45 IRR 16.5% 3.69 4.30 4.92 4.88 4.88 4.88 4.88 4.88 4.88 45.00 Assumptions Annual Output (metric tons) 250,000 Output Gain Per Year Prior Year 2.0% Discount Rate Maximum Possible Output 267,500 Price/Ton (pounds sterling) 675 Tax Rate Inflation (prices and costs) Gross Margin Growth Rate/Year Maximum Possible Gross Margin Gross Margin Investment Outlay (millions) 0.0% Depreciable Life (years) Overhead Investment Salvage Vale 0.50% WIP Inventory/Cost of Goods Sold 15.0% 11.5% Terminal Value of Right-of-Way Months Downtime, Construction 2008 30.0% 2009 Now 3.5 2010 2008 5 2011 2009 1 2010 1 10.0% 15 0.0% 0 3.0% 40 0 1 2 3 Year Now 2008 2009 2010 1. Estimate of Incremental Gross Profit New Output (tons) New Sales (Millions) New Gross Margin New Gross Profit Old Output 255,000 260,100 265,302 267,500 Lost Output Construction (106,250) (86,700) (66,326) 100.41 117.05 134.31 11.5% 11.55 12.0% 12.5% 14.05 16.79 250,000 250,000 250,000 250,000 Old Sales 168.75 168.75 Old Gross Profit 19.41 19.41 168.75 19.41 Incremental Gross Profit (7.86) (5.36) (2.62) 2. Estimate of Incremental Depreciation Yr. 1 Outlays 0.67 0.58 0.50 Yr. 2 Outlays 0.14 0.12 Yr. 3 Outlays 0.15 Total, New Depreciation 0.67 0.72 0.78 3. Overhead 0 0 0 4. Pretax Incremental Profit (8.53) (6.08) (3.39) 5. Tax Expense (256) (1.82) (1.02) 6. Aftertax Profit (5.97) (4.26) (238) 7. Cash Flow Adjustments Add Back Depreciation 0.67 0.72 0.78 Less Added WIP Inventory 1.81 (0.42) (0.44) ''ཟླ ིི ཙྪཱཙྪནྟི ཧྰུྃཊྛུཎྜ, ཨྰཿ ཏཱ ཙིཏྟི 6 2011 2012 2013 7 2014 8 9 10 11 12 13 14 15 2015 2016 2017 2018 2019 2020 2021 2022 267,500 267,500 267,500 267,500 267,500 267,500 267,500 267,500 267,500 267,500 267,500 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 180.56 13.0% 13.5% 14.0% 23.47 24.38 25.28 14.5% 26.18 15.0% 27.08 15.0% 27.08 15.0% 27.08 15.0% 27.08 15.0% 15.0% 15.0% 15.0% 27.08 27.08 27.08 27.08 250,000 250,000 168.75 250,000 168.75 168.75 168.75 250,000 250,000 250,000 250,000 250,000 250,000 168.75 168.75 168.75 168.75 168.75 168.75 250,000 250,000 168.75 168.75 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41 4.07 4.97 5.87 6.78 7.68 7.68 7.68 7.68 7.68 7.68 7.68 7.68 0.43 0.38 0.33 0.28 0.24 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.10 0.09 0.08 0.07 0.06 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.13 0.11 0.09 0.08 0.07 0.06 0.05 0.05 0.05 0.05 0.05 0.05 0.67 0.58 0.50 0.43 0.37 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0 0 0 0 0 0 0 0 0 0 0 0 3.40 4.39 5.38 6.35 7.31 7.35 7.35 7.35 7.35 7.35 7.35 7.35 1.02 1.32 1.61 1.90 2.19 2.20 2.21 2.21 221 2.21 2.21 2.21 3.08 3.76 444 5.12 5.14 5.15 5.15 5.15 5.15 5.15 5.15 0.67 0.58 0.50 0.43 0.37 0.33 0.33 0.33 0.33 0.33 0.33 0.33 Recovery of added W (1.19) 0.03 0.03 0.03 0.03 0.12 Less Capital Spending (3.50) (5.00) (1.00) (1.00) 40.0 Temmal Value, Land 8. Free Cash Flow (3.50) (8.49) (4.96) (3.03) 1.86 3.68 4.29 4.90 5.51 5.47 5.47 5:47 5.47 5.47 5.47 45.60 DCF, Rotterdam= 15.50 IRR, Rotterdam= 18.0% 9. Adjustment for Erosion in Merseyside Volume: 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 17,500 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 11.81 136 1.36 1.36 1.36 1.36 136 1.36 136 136 1.36 1.36 1.36 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) (0.60) Lost Merseyside Output Lost Merseyside Revenue Lost Merseyside Gross Profits Lost Gross Profits After Taxes Change in Merseyside Inventory Total Effect on Free Cash Flow DCF, Erosion Merseyside 3.05 Cash Flows After Erosion (3.50) (8.49) (4.96) (3.03) 26 1.26 3.08 8 DCF, Rotterdam Adjusted for Full Erosion at Merseyside = 12.45 IRR 16.5% 3.69 4.30 4.92 4.88 4.88 4.88 4.88 4.88 4.88 45.00

Answer rating: 100% (QA)

To calculate the NPV IRR Payback Period and growth in EPS we will use the provided financial data an... View the full answer