Corporate Finance
200 Corporate Finance A project has the following cash flows: Year Cash flow 0 (100,000) 1 80,000 2 100,000 3 (200,000) 4 12 ...
Detergents India Limited 201 Chapter 10 10. A Case Study: Detergents India Limited OBJECTIVES Introduce the student to the F ...
202 Corporate Finance THE FMCG INDUSTRY The consumer products’ industry comprises personal care, cosmetics, and home products. ...
Detergents India Limited 203 The market for detergents is dominated by HLL and Procter & Gamble with four other companies ...
204 Corporate Finance HLL’S PERSPECTIVE: MAKE OR BUY? The make or buy analysis essentially involves comparing the cost of manu ...
Detergents India Limited 205 DIL’S PERSPECTIVE In 1995 the detergents market was growing at 6.7 percent. HLL was outsourcing 2 ...
206 Corporate Finance Table contd. Expenses 645,000.(@ 430 per MT) Depreciation 96,420 Overheads 100,000 Interest @18 percent^ ...
Detergents India Limited 207 Land and building – Machinery Rs 15.3 lac Net working capital Rs 2,943,291 Revenues @ Rs 450 per ...
208 Corporate Finance Table contd. Administrative overheads Kodur 100,000 Coimbatore 50,000 Gulbarga 50,000 Depreciation Kodur ...
Risk Analysis in Capital Investments 209 Chapter 11 11. Risk Analysis in Capital Investments OBJECTIVES What are the risks i ...
210 Corporate Finance chance of running over schedule, costing you Rs 100 out of your own pocket, that might be a risk you are ...
Risk Analysis in Capital Investments 211 Years Variable 1 2 10 Sales growth rate (percent) Pessimistic 11 11 10 Most likely 13 ...
212 Corporate Finance Project life = 10 years. Number of units sold in lac (No.). Years 20" 14" 1 1.5 2.7 2 1.875 3.375 3 2. ...
Risk Analysis in Capital Investments 213 Similarly, the sensitivity of NPV and IRR to changes in other variables like sales gr ...
214 Corporate Finance Table contd. Year Cash flow 2 128 3 180 4 389 5 365 6 342 7 307 8 1,068 *8th year cash flow includes sal ...
Risk Analysis in Capital Investments 215 Exhibit 11.3 contd. Year 1 1.1 1.2 0.9 0.8 8 268 294.80 321.6 241.20 214.4 9 248 272. ...
216 Corporate Finance A typical B-E chart is shown in Exhibit 11.5. Financial BEP refers to the level of activity at which NPV ...
Risk Analysis in Capital Investments 217 Build a small plant during the introductory period, and expand quickly if the demand ...
218 Corporate Finance The cash flows for each alternative outcome are: A large plant with high volume would yield Rs 10 lac a ...
Risk Analysis in Capital Investments 219 Add the two to get the expected value at Decision Point 2 = Rs 1941501 Calculate exp ...
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