Pg no 141 Q15

Initial Capacity 1 Unit Price 0.49 Tax Rate 0.48 Note All product units in cro
Unit
Capacity Variable
Buildup rate 0.3 cost 0.120 Investment 1 All cash flows in Rs cro
Full capacity 2 Fixed Cost 0.25 Depreciation/yr 0.15
Increment
al Fixed
Cost/yr 0.03 Max Depreciation 0.15
d 0.18

Time 0 1 2 3 4 5 6 7
Quantity of
0 1 1.3 1.6 1.9 2 2 2
Production
Sales Revenue 0 0.49 0.637 0.784 0.931 0.98 0.98 0.98
Variable cost 0 0.12 0.156 0.192 0.228 0.24 0.24 0.24
Fixed Cost 0 0.25 0.2575 0.265225 0.273182 0.281377 0.289819 0.298513
Book Value 1 0.85 0.7 0.55 0.4 0.25 0.1 0
Depreciation 0 0.15 0.15 0.15 0.15 0.15 0.15 0.1
Tax 0 0 0.03528 0.084852 0.134313 0.148139 0.144087 0.163914
Investment 1 0 0 0 0 0 0 0
Salvage Value 0 0 0 0 0 0 0 0
Cash Flow -1 0.12 0.18822 0.241923 0.295505 0.310484 0.306094 0.277573
NPV -0.127229

Capacity
Buildup Rate 0.3
-0.127228621 0.15 0.12 0.1 0.09
0.45
0.48
0.5
0.51

CF -1000 200 200 200 100 100 100 150

PV -1000 169.49153 143.6369 121.72617453586 51.57889 43.71092 37.04315 47.08875
NPV -385.7237
-385.7237
All product units in crores

All cash flows in Rs crores

Capacity
Buildup
Rate 0.2
-0.211058 0.15 0.12 0.1 0.09
0.45 -0.457641 -0.34657 -0.276832 -0.243945
0.48 -0.34657 -0.243945 -0.178171 -0.145284
0.5 -0.276832 -0.178171 -0.112397 -0.083578
0.51 -0.243945 -0.145284 -0.083578 -0.054759

Capacity
Buildup
Rate 0.25
-0.160733 0.15 0.12 0.1 0.09
0.45 -0.411666 -0.297721 -0.229227 -0.19498
0.48 -0.297721 -0.19498 -0.126486 -0.092239
0.5 -0.229227 -0.126486 -0.057992 -0.027813
0.51 -0.19498 -0.092239 -0.027813 0.002366
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