![[object Object],Projected profitability statement for the first five years of the project is given below: -<br /> LINK Excel.Sheet.8 quot;
E:My DocumentsFMS Part Time MBASemester 43106 Management of Project Financial ServicesAssignment Southern Chemicals.xlsxquot;
quot;
P&L!R1C1:R60C8quot;
4 <br />YearYearYearYearYearYearParticularsUnits012345ProductionCapacity UtilizationFeed Grade60%70%80%80%80%IP Grade60%70%80%80%80%Installed CapacityFeed GradeMT40004000400040004000IP GradeMT40004000400040004000Utilized CapacityFeed GradePMT24002800320032003200IP GradePMT24002800320032003200Sales PriceFeed GradePMT2800028000280002800028000IP GradePMT85008500850085008500Sales RevenuesFeed GradeRs Lakhs672.00784.00896.00896.00896.00IP GradeRs Lakhs204.00238.00272.00272.00272.00Total Sales RevenuesRs Lakhs876.001022.001168.001168.001168.00Variable CostsCost of Raw MaterialsFeed GradeRs Lakhs396.00462.00528.00528.00528.00IP GradeRs Lakhs111.60130.20148.80148.80148.80Cost of Goods SoldRs Lakhs507.60592.20676.80676.80676.80Gross ProfitRs Lakhs368.40429.80491.20491.20491.20Consumable StoresRs Lakhs17.5220.4423.3623.3623.36PowerRs Lakhs35.0440.8846.7246.7246.72FuelRs Lakhs21.925.5529.229.229.2Packaging CostsRs Lakhs8.7610.2211.6811.6811.68Selling and Distribution ExpensesRs Lakhs26.2830.6635.0435.0435.04Wages and SalariesRs Lakhs4.805.606.406.406.40Total Variable CostsRs Lakhs114.3133.35152.4152.4152.4ContributionRs Lakhs254.10296.45338.80338.80338.80Fixed CostsAdministrative ExpensesRs Lakhs5.505.786.066.376.69Wages and SalariesRs Lakhs19.2020.1621.1722.2323.34Public Issue ExpensesRs Lakhs3.003.003.003.003.00Total Fixed CostsRs Lakhs27.7028.9430.2331.5933.02PBDITRs Lakhs226.40267.52308.57307.21305.78Depreciation (SLM)Rs Lakhs51.6251.6251.6251.6244.96PBITRs Lakhs174.78215.90256.95255.59260.82InterestRs LakhsTerm LoanRs Lakhs 31.08 31.08 31.08 31.08 15.54 Working Capital RequirementsRs Lakhs 14.60 17.01 19.42 19.43 19.44 Total InterestRs Lakhs 45.68 48.09 50.50 50.51 34.98 PBTRs Lakhs 129.10 167.81 206.45 205.08 225.84 TaxRs Lakhs 27.86 49.83 69.62 73.85 82.35 PATRs Lakhs 101.25 117.98 136.83 131.23 143.49 <br />,[object Object],Cash AccountInflowsOpening Bal78.0078.00152.87309.74485.32557.03Bank Borrowing Incremental116.6619.4319.290.000.00Sale of assets101.26Cash profits152.87169.59188.44182.85188.45Total0.00347.53341.89207.73182.85289.71OutflowsRepayment of TL111.00111.00Investmment in WC194.6632.1532.150.140.15Total0.00194.6632.1532.15111.14111.15Closing Balance78.00152.87309.74485.32557.03735.60<br />,[object Object]](https://image.slidesharecdn.com/assignmentsouthernchemicals-110519064838-phpapp01/85/Assignment-southern-chemicals-1-320.jpg)
![Cash Break-even point in terms of sales for the 3rd year.Sales876.001022.001168.001168.001168.00VC621.90725.55829.20829.20829.20Contribution254.10296.45338.80338.80338.80P/V Ratio0.290.290.290.290.29FC24.7025.9427.2328.5930.02CBEP85.1589.4193.8898.57103.50<br />Calculations show that the break-even point of sales is 93.88 for the 3rd year.<br />,[object Object],16.55%012345PAT101.24117.96136.81131.22143.49+DEP+ share issue expenses54.6354.6354.6354.6347.96Operating CF155.87172.59191.44185.85191.45Repayment of term loan0.000.000.00-111.00-111.00Terminal Cf-572.00101.26Recovery of WC Margin103.70Total CF-572.00155.87172.59191.4474.85285.41PVF1.0000.8580.7360.6320.5420.465PV-572.00133.74127.06120.9240.56132.71<br />NPV = -17.01 for WACC =16.55%<br />WACC = 350/572 * 21.28 + 222 * 14 (1-35%) =16.55%<br />,[object Object],16.55%012345PAT101.24117.96136.81131.22143.49+DEP+ share issue expenses54.6354.6354.6354.6347.96Operating CF155.87172.59191.44185.85191.45Repayment of term loan0.000.000.00-111.00-111.00Terminal Cf-572.00101.26Recovery of WC Margin103.70Total CF-572.00155.87172.59191.4474.85285.41PVF1.0000.8580.7360.6320.5420.465PV-572.00133.74127.06120.9240.56132.71<br />,[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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