Question Ai

1672641, Module B, May 2011

Most likely Scenario Forecast income statement
years

Revenue - w1

2012
36.0

2013
36.0

2014
36.0

2015
36.0

5 years 6-20
$m
2016 2017-2031
36.0
28.0

Costs
running cost -w2
depreciation - w3
Salary
profits before bonus
Bonus @ 5%
operating profit

3.0
7.2
1.2
24.6
1.2
23.4

3.2
7.2
1.2
24.4
1.2
23.2

3.4
7.2
1.2
24.2
1.2
23.0

3.6
7.2
1.2
24
1.2
22.8

3.8
7.2
1.2
23.8
1.2
22.6

4.2
7.2
1.2
15.4
0.8
14.6

Loan Interest - w4
Gross profit
Tax @ 20%
Net Profit

0.5
22.8
4.6
18.3

0.5
22.6
4.5
18.1

0.5
22.5
4.5
18.0

0.5
22.3
4.5
17.8

0.5
22.1
4.4
17.7

0.3
14.3
2.9
11.4

$m

w1 revenue
year 1 -5
years 6-20

2
$m

3
$m

4
$m

$m

2400 x 2000 x 0.15 x 50 = 36m

2400 x 2000 x 0.12 x 50 = 28m

w2 running costs
year 2
year 3
year 4
year 5

2000 x $30 x 50 = $3m

3 x 1.05 = 3.2
3.2 x 1.05 = 3.4
3.4 x 1.05 = 3.6
3.6 x 1.05 = 3.8

w3 depreciation

total capital cost = (144.2- 0.8) / 20 = 7.2

loan value =
op profit/3
w5 loan interest
at 7%
words 129

years

( 50 x 1.9 = cost of turbines)

1
7.8

2
7.7

3
7.7

4
7.6

5 6-20
7.5

4.9

0.5

0.5

0.5

0.5

0.5

0.3

Aii

1672641, Module B, May 2011

Worst case Scenario Forecast income statement

years

(least running hours and maximun costs.)

Revenue - w1

2012
27.0

2013
27.0

2014
27.0

2015
27.0

5 years 6-20
$m
2016 2017-2031
27.0
21.6

Costs
running cost -w2
depreciation - w3
Salary
profits before bonus
Bonus @ 5%
operating profit

4.0
8.2
1.2
13.6
0.7
12.9

4.2
8.2
1.2
13.4
0.7
12.7

4.4
8.2
1.2
13.2
0.7
12.5

4.6
8.2
1.2
13
0.7
12.4

4.8
8.2
1.2
12.8
0.6
12.2

5
8.2
1.2
7.2
0.4
6.8

Loan Interest - w4
Gross profit
Tax @ 20%
Net Profit

0.5
12.4
2.5
9.9

0.5
12.2
2.4
9.8

0.5
12.0
2.4
9.6

0.5
11.8
2.4
9.5

0.5
11.6
2.3
9.3

0.3
6.5
1.3
5.2

$m

w1 revenue
year 1 -5
years 6-20

2
$m

3
$m

4
$m

$m

1800 x 2000 x 0.15 x 50 = 27m

1800 x 2000 x 0.12 x 50 = 21.6m

w2 running costs
year 2
year 3
year 4
year 5
year 6-20

2000 x $40 x 50 = $4m

4 x 1.05 = 4.2
4.2 x 1.05 = 4.4
4.4 x 1.05 = 4.6
4.6 x 1.05 = 4.8

w3 depreciation

total capital cost = (164.4- 0.50) / 20 = 8.2

loan value =
op profit/3
w5 loan interest
at 7%
words 129

years

( 50 x 1.9 = cost of turbines)

1
4.3

2
4.2

3
4.2

4
4.1

5 6-20
4.1

2.3

0.3

0.3

0.3

0.3

0.3

0.2

Aiii
1672641, Module B, May 2011
Best case Scenario Forecast income statement
Years

(most running hours and minimum costs.)

Revenue - w1

2012
39.0

2013
39.0

2014
39.0

2015
39.0

5 years 6-20
$m
2016 2017-2031
39.0
31.2

Costs
running cost -w2
depreciation - w3
Salary
profits before bonus
Bonus @ 5%
operating profit

2.5
7.0
1.2
28.3
1.4
26.9

2.6
7.0
1.2
28.2
1.4
26.8

2.7
7.0
1.2
28.1
1.4
26.7

2.8
7.0
1.2
28
1.4
26.6

2.9
7.0
1.2
27.9
1.4
26.5

3.5
7.0
1.2
19.5
1.0
18.5

Loan Interest - w4
Gross profit
Tax @ 20%
Net Profit

0.6
26.3
5.3
21.0

0.6
26.2
5.2
21.0

0.6
26.1
5.2
20.9

0.6
26.0
5.2
20.8

0.6
25.9
5.2
20.7

0.4
18.1
3.6
14.5

$m

w1 revenue
year 1 -5
years 6-20

2
$m

3
$m

4
$m

$m

2600 x 2000 x 0.15 x 50 = 39m

2600 x 2000 x 0.12 x 50 = 31.2m

w2 running costs
year 2
year 3
year 4
year 5
year 6-20
w3 depreciation

2000 x $25 x 50 = $2.5m

2.5 x 1.05 = 2.6
2.6 x 1.05 = 2.7
2.7 x 1.05 = 2.8
2.8 x 1.05 = 2.9
4.2
total capital cost = (140.4- 1.0) / 20 = 7

loan value =
op profit/3
w5 loan interest
at 7%
words 129

years

( 50 x 1.9 cost of turbines)

1
9.0

2
8.9

3
8.9

4
8.9

5 6-20
8.8

6.2

0.6

0.6

0.6

0.6

0.6

0.4

Question C
1672641, Module B,
Most likely Scenario NPV calculations
$m
years
operating profit
add back dep
residual
revenue inflows
outflows
wind turbines
Land
other capital
tax
revenue outflows

$m

May 2011

1
23.4
7.2

$m
2
23.2
7.2

$m
3
23.0
7.2

$m
4
22.8
7.2

$m

$m
5 6-19
22.6
14.6
7.2
7.2

30.6

30.4

30.2

30.0

29.8

21.8

20
14.6
7.2
0.8
22.6

110.6

33.6
4.6
38.2

4.5
4.5

4.5
4.5

4.5
4.5

4.4
4.4

2.9
2.9

2.9
2.9

-110.6
0
-110.6

-7.6
0.9
-6.84

25.9
0.811
21.0

25.7
0.731
18.8

25.5
0.658
16.8

25.4
0.593
15.1

18.9
4.143
78.3

19.7
0.124
2.4

95
15.6

Totals
discount @ 11%

NPV

34.9

words 67

Question C
Worst case Scenario NPV calculations
$m
years
operating profit
add back dep
residual
revenue inflows
outflows
wind turbines
Land
other capital
tax
revenue outflows

$m

$m

$m

$m

$m

$m

$m

1
12.9
8.2

2
12.7
8.2

3
12.5
8.2

4
12.4
8.2

5
12.2
8.2

6-19
6.8
8.2

21.1

20.9

20.7

20.6

20.4

15.0

20
6.8
8.2
0.5
15.5

110.6

53.8
2.5
56.3

2.4
2.4

2.4
2.4

2.4
2.4

2.3
2.3

1.3
1.3

1.3
1.3

-110.6
0
-110.6

-35.2
0.9
-31.6

18.5
0.811
15.0

18.3
0.731
13.4

18.2
0.658
12.0

18.0
0.593
10.7

13.7
4.143
56.9

14.2
0.124
1.8

95
15.6

Totals
discount @ 11%

NPV

-32.5

words 67

Question C
Best case Scenario NPV calculations
$m
years
operating profit
add back dep
residual
revenue inflows
outflows
wind turbines
Land
other capital
tax
revenue outflows
Totals
discount @ 11%

NPV

$m

$m

$m

$m

$m

$m

$m

1
26.9
7.0

2
26.8
7.0

3
26.7
7.0

4
26.6
7.0

5
26.5
7.0

6-19
18.5
7.0

33.9

33.8

33.7

33.6

33.5

25.5

20
18.5
7.0
1
26.5

110.6

29.8
5.3
35.1

5.2
5.2

5.2
5.2

5.2
5.2

5.2
5.2

3.6
3.6

3.6
3.6

-110.6
0
-110.6

-1.2
0.9
-1.1

28.6
0.811
23.2

28.5
0.731
20.8

28.4
0.658
18.7

28.3
0.593
16.8

21.9
4.143
90.7

22.9
0.124
2.8

95
15.6

61.4

words 67