International Finance and Accounting Handbook

4 • 16 FOREIGN INVESTMENT ANALYSIS

CACAU DO BRASIL, S.A.

Current Asset Balances After Five Years

(In Thousands of Brazilian Reals)

Cash A/R Inventory

1. Initial balance 5,685 6,250 8,065


2. Year 1 addition 3,942 0 618


3. Year 2 addition 3,490 445 669


4. Year 3 addition 3,454 477 709


5. Year 4 addition 3,419 510 772


6. Year 5 addition 3,377 547 824
   —–—– —––– ———


7. Ending balances 23,367 8,229 11,657

Note 1:Initial operating cash balance is from Exhibit 4A.1. Additions to cash balances are
from line 14 of Exhibit 4A.3. Additions to receivables and inventory balances are from lines
3 and 6 of Exhibit 4A.3.

Exhibit 4A.4. Current Asset Values After Five Years.

CACAU DO BRASIL, S.A.

Terminal Value at the End of Five Years

1. Original cost of net plant and equipment: R$ 60,000,000


2. Less depreciation for five years @ R$7,500,000/yr. –37,500,000
   ——–———


3. Net book value of plant and equipment R$ 22,500,000


4. Plus ending cash balance (Exhibit 4A.4, line 7) +23,367,000


5. Plus ending receivable balance (Exhibit 4A.4, line 7) + 8,229,000


6. Plus ending inventory (Exhibit 4A.4, line 7) +11,657,000
   ——–———


7. Terminal value at end of year 5 R$ 65,753,000

Exhibit 4A.5. Terminal Value at the End of Five Years.

CACAU DO BRASIL, S.A.

Present Value (PV) of Subsidized Loan

(In Thousands of Brazilian Reals)

Year Year Year Year Year Year

0 12345

1. Principal +24,000


2. Loan payments from
   Note 2 of Exhibit 4A.1: –5,543 –5,543 –5,543 –5,543 –5,543


3. 14% PV factor: 1.0000 0.8772 0.7695 0.6750 0.5921 0.5194
   ––––––– —–—– —–—– —–—– ——— ––––––


4. PV of each payment +24,000 –4,862 –4,265 –3,742 –3,282 –2,879


5. Net PV of all payments + 4,970

Exhibit 4A.6. Present Value of Subsidized Loan.