Essay About Rankings Note And Maximum Payback

Euroland
Euroland
FCF and Analysis of Proposed Projects
(all Values in Ђ millions)
Project
Expand Truck Fleet
New Plant
Expanded Plant
Snack Foods
Automation & Conveyer Systems
Southward Expansion
Eastward Expansion
Artificial Sweetner
Inventory Control System
Investment
Property
30.00
37.50
15.00
22.50
21.00
22.50
22.50
Working Capital
30.00
30.00
0.00
-17.10
-45.00
-15.00
-9.00
-21.00
-30.00
-30.00
-27.00
-18.00
-11.85
-9.00
8.25
-9.00
8.25
7.50
10.50
10.13
10.50
11.25
10.50
12.00
11.25
Expected FCFC
11.55
35.64
10.89
29.25
56.25
48.75
42.75
6.00
(Undiscounted)
Payback (years)
Maximum Payback Accepted
11.3%
11.3%
13.4%
21.4%
18.8%
20.5%
16.2%
Minimum Acepted ROR
10.0%
10.0%
12.0%
12.0%
12.0%
12.0%
8.0%
Spread
-0.2%
8.2%
NPV (WACC 10.6%)
-2.88
-1.31
17.99
13.49
13.43
1.75
NPV at Minimum ROR
-0.19
14.85
10.62
10.97
2.67
10.6%
Equivalent Annuity
-0.04
1.03
RANKINGS
NOTE__> Effluent Treatment is considered Project #11
Ђ120M
Project
Investment
Payback
-2.88
-0.04
-0.087
11.3%
0.033
11.2%
0.027
13.4%
0.139
-1.31
-0.062
17.99
21.4%
0.600
13.49
18.8%
0.450
13.43
20.5%
0.497
16.2%
0.078
69.45
27.5%
10.56
1.158
18.5%
0.173
OPTIMAL COMBINATION
Ђ120M
Project
Investment
Total
ProducedNPV
69.45
1.158
69.450
17.99
0.600
87.440
13.49
0.450
100.930
13.43
0.497
0.139
0.078
196.5
0.033
241.5
0.173
247.5
0.027
262.5
-1.31
-0.062
283.5
-2.88
-0.087
316.5
IRR Ranking
Ђ120M
Project
Investment
Total
ProducedNPV
69.45
27.5%
69.45
69.45
17.99
21.4%
87.44
87.44
13.43
20.5%
100.87
117.44