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GOODWEEK TIRES, INC. After extensive research and development, Goodweek Tires, Inc., has recently developed a new tire, the S

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Please see the calculations below:

Project Variables Y0 Y1 Y2 Y3 Y4
Project Cost
R&D Cost USD Mn 10
Test Mktng Cost USD Mn 5
Production Cost USD Mn 160
Salvage Value USD Mn -65
OEM Mkt
Size Mln. 24.8
Mkt Share 11%           2.73           2.78           2.84           2.89           2.95
Mkt Sale Price $ per tire 41         42.74         44.56         46.45         48.43
VC $ per tire 29         30.23         31.52         32.86         34.25
Replacement Mkt
Size Mln 32
Mkt Share 8%           2.56           2.61           2.66           2.72           2.77
Mkt Sale Price $ per tire 62         64.64         67.38         70.25         73.23
VC $ per tire 29         30.23         31.52         32.86         34.25
FC USD Mn.         43.00         44.83         46.73         48.72
WC reqm USD Mn 9 15% of sales 15% of sales 15% of sales 15% of sales
Inflation Rate 4.25% p.a.
Coprorate TC 40%
Disc. factor 13.40%
YOY growth rate 2%
Profitability Statement USD Mn. Y0 Y1 Y2 Y3 Y4
Total Income
OEM      118.93      126.47      134.48      143.00
Replacement 168.7749 179.4668 190.836 202.9255
VC 163.0668 173.3971 184.3818 196.0624
FC         43.00         44.83         46.73         48.72
EBIDTA         81.64         87.71         94.20      101.14
Int cost           5.78           6.15           6.54           6.95
Dep 23.75 23.75 23.75 23.75
PBT         52.11         57.81         63.91         70.44
Tax         20.84         23.12         25.56         28.18
PAT         31.27         34.69         38.35         42.26
Cashflows USD Mn Y0 Y1 Y2 Y3 Y4
Inflows
Sales income      287.71      305.93      325.32      345.92
Salvage Value 65
Outflows
VC 163.0668 173.3971 184.3818 196.0624
FC 43 44.8275 46.73267 48.71881
Int Cost           5.78           6.15           6.54           6.95
Tax         20.84         23.12         25.56         28.18
R&D Cost 10
Test Mktng Cost 5
Production Cost 160
    -175.00         55.02         58.44         62.10      131.01
-1.75179
NPV USD Mn      215.76
Pay back period years           1.75
Discounted Pay back Period years           1.42
IRR 23%
Principal investment USD Mn      175.00
Plus WC USD Mn           9.00

> Can i know the calculation for this table?

Ram Shawn Wed, Nov 17, 2021 10:53 AM

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