Question

1.  Do this question in excel, make your own template and formula. PT Sharp Ontime Watch is manufacture several types of watches. The watch is made for multigenations and range from expensive one to cheap one. The company is making a new type special for biker. The style is sporty yet elegant. The Name for this type will be “Elegant Bikers”. The elegant biker will selling price IDR 850 with variable cost IDR 430. PT Sharp Ontime Watch already spent IDR 150.000 for marketing expenses in several sosial media including the influencers. The company determine to sell 60.000 units elegant bikers per year for seven years. Marketing intelligent determine the company will lose IDR 12.000 units in type “casual sporty” because the existing customers may switch to new type. Selling price for casual sporty is IDR 1.100 and variable cost IDR 620. PT Sharp Ontime Watch is also increasing the teenager model by 15.000 units. Selling price per unit for teenager model is IDR 400 and variable cost per unit IDR 210. Annual fixed cost IDR 9.300.000. R&D expenses for elegant bikers is IDR 1.000.000. Cost for plant equipment IDR 28.700.000. and it will be depreciated straight line. The new type elegant bikers also need additional working capital IDR 1.400.000 and it will be returned at the end of project. Tax rate 40%, cost of capital 14%. Calculate Payback periode, NPV and IRR.

Answer 1

Year		0	1	2	3	4	5	6	7
Contribution from elegant biker			25.200.000	25.200.000	25.200.000	25.200.000	25.200.000	25.200.000	25.200.000
Contribution lost from casual sporty			-5.760.000	-5.760.000	-5.760.000	-5.760.000	-5.760.000	-5.760.000	-5.760.000
Contribution from increased sales of teenager model			2.850.000	2.850.000	2.850.000	2.850.000	2.850.000	2.850.000	2.850.000
Fixed costs			-9.300.000	-9.300.000	-9.300.000	-9.300.000	-9.300.000	-9.300.000	-9.300.000
Annual depreciation			-4.100.000	-4.100.000	-4.100.000	-4.100.000	-4.100.000	-4.100.000	-4.100.000
EBIT			8.890.000	8.890.000	8.890.000	8.890.000	8.890.000	8.890.000	8.890.000
NOPAT			5.334.000	5.334.000	5.334.000	5.334.000	5.334.000	5.334.000	5.334.000
OCF			9.434.000	9.434.000	9.434.000	9.434.000	9.434.000	9.434.000	9.434.000
Equipment cost		-28.700.000
Working capital		-1.400.000							1.400.000
Net cash flows		-30.100.000	9.434.000	9.434.000	9.434.000	9.434.000	9.434.000	9.434.000	10.834.000
Cumulative cash flows		-30.100.000	-20.666.000	-11.232.000	-1.798.000	7.636.000	17.070.000	26.504.000	37.338.000
Payback period (years)		3,19
NPV		10.915.360
IRR		25,02%