Name: Dang Thi Lien

Class: K56QTKD
Case Study - Conch Republic Electronics
Input Area:

Equipment
Salvage value
R&D
Marketing study

Sales(units)
Depreciation
rate
Sales of old
PDA
Lost sales
Price
VC
FC
Price of old PDA
Price reduction
of old PDA
VC of old PDA
Tax rate
NWC
percentage
Required return

$15,000,000
$3,000,000
$750,000
$200,000

sunk cost
sunk cost

Year 1
70,000

Year 2
80,000

Year 3
100,000

Year 4
85,000

Year 5
75,000

14.29%

24.49%

17.49%

12.49%

8.93%

80,000
15,000

60,000
15,000

$250
$86
$3,000,000
$240
$20
$68
35%
20%
12%

Output Area:
Sales
New
Lost sales
Lost rev.
Net sales

Year 1
$17,500,000
3,600,000
1,300,000
$12,600,000

Year 2
$20,000,000
3,600,000
900,000
$15,500,000

$6,020,000
1,020,000
$5,000,000

$6,880,000
1,020,000
$5,860,000

Sales
VC
Fixed costs
Dep
EBT
Tax
NI
+Dep
OCF

$12,600,000
5,000,000
3,000,000
2,143,500
$2,456,500
859,775
$1,596,725
2,143,500
$3,740,225

$15,500,000
5,860,000
3,000,000
3,673,500
$2,966,500
1,038,275
$1,928,225
3,673,500
$5,601,725

NWC
Beg
End
NWC CF

$0
2,520,000
($2,520,000)

VC
New
Lost sales

Net CF

$1,220,225

Year 3
Year 4
Year 5
$25,000,000 $21,250,000 $18,750,000

$25,000,000 $21,250,000 $18,750,000

$8,600,000

$7,310,000

$6,450,000

$8,600,000

$7,310,000

$6,450,000

$25,000,000 $21,250,000 $18,750,000

8,600,000
7,310,000
6,450,000
3,000,000
3,000,000
3,000,000
2,623,500
1,873,500
1,339,500
$10,776,500
$9,066,500 $7,960,500
3,771,775
3,173,275
2,786,175
$7,004,725 $5,893,225 $5,174,325
2,623,500
1,873,500
1,339,500
$9,628,225 $7,766,725 $6,513,825

$2,520,000
$3,100,000
3,100,000
5,000,000
($580,000) ($1,900,000)

$5,000,000
4,250,000
$750,000

$5,021,725

$8,516,725 $10,763,825

$7,728,225

$4,250,000
0
$4,250,000

Salvage
BV of equipment
Taxes
Salvage CF
Net CF

Payback period
PI
IRR
NPV

$3,346,500
121,275
$3,121,275
Time
0
1
2
3
4
5

($15,000,000)
$1,220,225
$5,021,725
$7,728,225
$8,516,725
$13,885,100
3.121
1.592
27.79%
$8,884,884.28