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8/3/2019 ms excel FM

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Sales income

Cost of Production (30% increased by 2% per annum)

Gross Profit

Less Admin Expenses (25% increased by 1% per annum)

Net Profit Before Deprecitaion Interest Taxes (NPBDIT)Less Deppreciation

NPBIT

Less Interest 6%

Profit before tax (PBT)

Less Tax 22%

Profit after tax (PAT)

Present Value of Invetment = 600000

Present Investment in the Equipment (A)

Present Value of Future profits (B)

Net Present Value = B - A

Management Decision

market rate at 5%

MARKET RATE AT 6%

market rate at 7%

market rate at 5.04%

Market Rate= PAT/(1+K)^n

1.The sales value for the year 2011 is 700000

2.The cost of production is 30% of sale

3. The gross profit = Sales value - Cost of production

4. the admin expenses is 25% of sales value

5. The Net Profit Before Depreciation, Intt and Taxes = The Gross Profit - The admin e

6. The interest is paid on the amount of machine or equipment purchased froim bank l7. The depreciation is calculated by dividing the total machine value with number of ye

8. The tax is calculated @ 22% on Profit Before Taxes

9. The Profit before Tax = Net Profit before Dep, Intt and Taxes - depreciation expense

10. Profit After Tax = PBT - taxes

11.The sales from the year 2012 will grow @ 5%

12. The Cost of production will grow @2%


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13. The Admin expenses will increase at 1%

14. In the above case, the value of the machine is 600000

15. The Machine is borrowed at 6% (borrowed from bank, and showing as intt expense

16. The Machine is used for 6 years. Depreciation = Total Macbnine value / 6 years

17.The intt expenses are constant for all the future years

18. The Depreciation value is same for all the years of calculation19. The market rate of interet in this case is 5.04% (Discounting rate)


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ms excel fm

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