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    Hitungan Kuis 6 Bethesda Mining Company

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    rica
    The document summarizes the financial analysis of a proposed mining project by Bethseda Mining Company over a 4 year period. It provides details of the net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), payback period, and profitability index calculations. Based on a positive NPV of $20,270,911.33, an IRR of 20.23%, MIRR of 15.64%, and a profitability index of 1.21, it recommends that Bethseda take on the project.

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    Hitungan Kuis 6 Bethesda Mining Company

    Uploaded by

    rica
    59 views6 pages
    The document summarizes the financial analysis of a proposed mining project by Bethseda Mining Company over a 4 year period. It provides details of the net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), payback period, and profitability index calculations. Based on a positive NPV of $20,270,911.33, an IRR of 20.23%, MIRR of 15.64%, and a profitability index of 1.21, it recommends that Bethseda take on the project.

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    hitungan kuis 6 bethesda mining company

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    The document summarizes the financial analysis of a proposed mining project by Bethseda Mining Company over a 4 year period. It provides details of the net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), payback period, and profitability index calculations. Based on a positive NPV of $20,270,911.33, an IRR of 20.23%, MIRR of 15.64%, and a profitability index of 1.21, it recommends that Bethseda take on the project.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    59 views6 pages

    Hitungan Kuis 6 Bethesda Mining Company

    Uploaded by

    rica
    The document summarizes the financial analysis of a proposed mining project by Bethseda Mining Company over a 4 year period. It provides details of the net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), payback period, and profitability index calculations. Based on a positive NPV of $20,270,911.33, an IRR of 20.23%, MIRR of 15.64%, and a profitability index of 1.21, it recommends that Bethseda take on the project.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6

    Bethseda Mining Company

    Answers: NPV = $20,270,911.33


    IRR = 20.23%
    MIRR = 15.64%
    Payback Period (in years)= 3.08
    Profitability Index= 1.21
    Should Bethesda take the project? Yes, because the NPV is positive. In addition, profita
    IRR is not reliable determinant. There are technicall

    Part 1. Input Data (in thousands of dollars)


    Project life 4
    Opportunity Cost (after tax) -$7,000,000
    Equipment Investment $85,000,000
    Contract calls for (tons of coal/year) 500,000
    Sales price per ton (per contract) $95
    Sales price per ton (excess of contract) $90
    Variable costs (per ton) -$31
    Fixed cost (per year) -$4,300,000

    Part 2. Sales Revenue


    Year Production (tons)
    1 620,000
    2 680,000
    3 730,000
    4 590,000

    Part 3. Depreciation and Amortization Schedule


    Year

    Equipment Depr'n Rate


    Equipment Depreciation Dollars
    Ending Book Val: Cost – Accum Depreciation

    Part 4. Net Salvage Values, in Year 4


    Estimated Sales Price in Year 4
    Book Value in Year 4
    Expected Gain or Loss
    Taxes paid or tax credit
    Net cash flow from salvage

    Part 5. Projected Net Cash Flows (Time line of Annual Cash Flows)
    Years
    Investment Outlays at Time Zero:
    Equipment
    Opportunity Costs
    Operating Cash Flows over the Project's Life:
    Sales revenue
    Operating Costs
    Depreciation (equipment)
    Oper. income before taxes (EBIT)
    Taxes on operating income (38%)
    After-tax operating income
    Add back depreciation
    Operating cash flow

    Terminal Year Cash Flows:


    Required level of net working capital
    Required investment in NWC

    Terminal Year Cash Flows:


    Net salvage value

    Net Cash Flow (Time line of cash flows)

    Part 6. Data for Payback Years

    Net cash flow


    Cumulative Cash Flow
    Part of year required for payback

    Part 7. Data for Profitability Index

    Part 8. Key Output: Appraisal of the Proposed Project

    Net Present Value (at 12%) $20,270,911.33


    IRR 20.23%
    MIRR 15.64%
    Payback Period 3.08
    Profitability Index 1.21
    Bethseda Mining Company

    use the NPV is positive. In addition, profitability index is above 1.


    reliable determinant. There are technically 2 IRRs, because of multiple change of signs.

    NWC/sales (starting yr 0) 5%
    Cost of reclamation of land (yr 5) -$2,800,000
    Charitable deduction (yr 6) $7,500,000
    Tax rate 38%
    Required Return 12%
    Depreciated on 7 year MACRS
    Market Value at yr 4 (but not selling) 60%

    Revenue per contract Revenue (excess) Total Revenue


    $47,500,000 $10,800,000 $58,300,000
    $47,500,000 $16,200,000 $63,700,000
    $47,500,000 $20,700,000 $68,200,000
    $47,500,000 $8,100,000 $55,600,000

    Years
    Initial Cost 1 2 3 4

    14.29% 24.49% 17.49% 12.49%


    85,000,000 $12,146,500 $20,816,500 $14,866,500 $10,616,500
    72,853,500 52,037,000 37,170,500 $26,554,000

    Equipment
    $51,000,000
    26,554,000
    24,446,000
    -9,289,480
    $41,710,520.00

    Years 0 1 2 3

    ($85,000,000)
    (7,000,000)
    $58,300,000 $63,700,000 $68,200,000
    (23,520,000) (25,380,000) (26,930,000)
    (12,146,500) (20,816,500) (14,866,500)
    $22,633,500 $17,503,500 $26,403,500
    (8,600,730) (6,651,330) (10,033,330)
    $14,032,770 $10,852,170 $16,370,170
    12,146,500 20,816,500 14,866,500
    $26,179,270 $31,668,670 $31,236,670

    ($2,915,000) ($3,185,000) ($3,410,000) ($2,780,000)


    ($2,915,000) ($270,000) ($225,000) $630,000

    ($94,915,000) $25,909,270 $31,443,670 $31,866,670

    0 1 2 3
    (94,915,000) 25,909,270 31,443,670 31,866,670
    ve Cash Flow (94,915,000) (69,005,730) (37,562,060) (5,695,390)
    ar required for payback 1.00 1.00 1.00

    0 1 2 3
    Net Cash Flow (94,915,000) 25,909,270 31,443,670 31,866,670
    Present Value (94,915,000) 23,133,276.79 25,066,701.21 22,682,066.27
    Accum'd
    Depr'n

    $58,446,000
    26,554,000

    4 5 6
    $55,600,000 0 0
    (22,590,000) (2,800,000) 0
    (10,616,500) 0 0
    $22,393,500 (2,800,000) 0
    (8,509,530) 1,064,000 2,850,000
    $13,883,970 (1,736,000) 2,850,000
    10,616,500 0 0
    $24,500,470 (1,736,000) 2,850,000

    $0 $0 0
    $2,780,000 $0 0

    $41,710,520

    $68,990,990 ($1,736,000) 2,850,000

    4 5 6
    68,990,990 (1,736,000) 2,850,000

    0.08

    4 5 6
    68,990,990 (1,736,000) 2,850,000
    43,845,021.39 (985,053.02) 1,443,898.70

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