Вы находитесь на странице: 1из 8

Problems in Cash Flow Management

JIMS

C-702

Ankur Wahal

Problem 1

A term loan of 300 Cr pays an interest rate of (3.25% spread, with base rate of 9.25% p.a). Suppose that the expected FCFF for the first seven years of project life are the following:

Year

1

2

3

4

5

6

7

FCFF

100

105

107

107

105

105

105

Show the debt Schedule with:

1.

Equated

2.

Structured

Repayment schedules

Problem 2

Project value 100 cr. Equity 15% and debt 85% Capex 4 installments 250 cr. at the end of each year in periods 1-4

The debt is further divided into the following structure:

Senior Debt 100% with repayments in 10 years and interest rate of 7%

Subordinate Debt 0% with repayments in 5 years and interest rate of 12%

The Project will generate steady cash flow of 14 cr. for the project life

Prepare the FCFE available for the equity shareholders

Problem 3

Project value 100 cr. Equity 15% and debt 85% Capex 4 installments 250 cr. at the end of each year in periods 1-4

The debt of 85% is further divided into the following structure:

Senior Debt 75% with repayments in 10 years and interest rate of 7%

Subordinate Debt 10% with repayments in 5 years and interest rate of 12%

The Project will generate steady cash flow of 14 cr. for the project life

Prepare the FCFE available for the equity shareholders

Problem 4

Project value 100 cr. Equity 15% and debt 85% Capex 4 installments 250 cr. at the end of each year in periods 1-4 Working Capital requirement is 3% of the Project Cost and bears an interest of 7%

The debt of 85% is further divided into the following structure:

Senior Debt 75% with repayments in 10 years and interest rate of 7%

Subordinate Debt 10% with repayments in 5 years and interest rate of 12%

The Project will generate steady Profits of 14 cr. for the project life

Prepare the FCFE available for the equity shareholders

Problem 5

A project whose value is 200 cr. starts operations at T 0. The Term Loan Project is 100 cr. 5% fixed rate is amortized in constant Principal repayment of 5 years. Tax rate is 30%.

Calculate:

Net income and cash flows for the sponsors in the 5 years of operating life, considering that the first 5 years of Project will generate EBITDA of 7.5 cr p.a.

Calculate the IRR.

Problem 6

The revenue and operating costs for a Project of 4000 cr are given below:

 

0

1

2

3

4

5

6

7

8

9

10

Rev

1125

1175

1225

840

855

865

885

895

925

925

Op costs

175

175

175

175

175

175

175

175

175

175

The depreciation schedule is as follows:

 

0

1

2

3

4

5

6

7

Dep

20%

20%

20%

10%

10%

10%

10%

Debt Equity ratio is 80:20, with debt repayment is equated for 10 years with bearing base interest rate of 7% with 3% spread.

The tax rate is 33%

Prepare the income statement and the cash flows and calculate the IRRs

Problem 7

A Special Purpose Vehicle starts in T 0 a 5,000 cr. project, financed with a D/E ratio of 1:1. Interest rate on the loan is floating rate but swapped against a 10% fixed interest rate.

The schedule of payments during construction is the following:

Year 0

10%

Year 1

25%

Year 2

40%

Year 3

25%

100%

Every payment during the construction period is financed based on the agreed D/E ratio. The amortization of the outstanding loan at the end of year 3 starts at the end of year 4 and will be completed at the end of year 8 according to the following percentages of principal repayment:

Year End

Based on the information provided, calculate:

1. the outstanding amount of the loan at the end of year 3; 2. the amortizing schedule of the loan during the period 4-8

Assuming from the operating year the company generates a steady cash flow of about 1000 cr. For next 5 years. Then Calculate the IRR.

4 15%

5 15%

6 20%

7 20%

8 30%

100%