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PROBLEM 11-6 Given Initial investment Total PCs scrapped Electronic scrap per PC Gold content Life.. 1 answer below » PROBLEM 11-6 Given Initial investment Total PCs scrapped Electronic scrap per PC Gold content Life of project PCs scrapped per year Tons of scrap per year Current price of gold Cost/ton for processing Tax rate Risk free rate WACC Growth in gold prices Forward Price Curve 2011 2012 2013 2014 2015 Solution Legend $450,000 1,000,000 units 6 pounds 0.33 ounce per ton 5 years 200,000 units 600 $592.80 per ounce $67.50 30.0% 5.0% 10.5% 7.0% = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball View complete question » PROBLEM 11-6 Given Initial investment Total PCs scrapped Electronic scrap per PC Gold content Life of project PCs scrapped per year Tons of scrap per year Current price of gold Cost/ton for processing Tax rate Risk free rate WACC Growth in gold prices Forward Price Curve 2011 2012 2013 2014 2015 Solution Legend $450,000 1,000,000 units 6 pounds 0.33 ounce per ton 5 years 200,000 units 600 $592.80 per ounce $67.50 30.0% 5.0% 10.5% 7.0% = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball Input = Crystal Ball Output Gold Expected Prices Price/Ounce per Ounce $679.40 $634.30 715.10 678.70 750.60 726.21 786.90 777.04 822.80 831.43 Solution a. Revenues Processing Costs Depreciation/ Depletion NOI NOPAT Plus: Depreciation Project FCF Revenues Year 2011 2012 2013 2014 2015 Processing Costs Depreciation/ Depletion NOI NOPAT Plus: Depreciation Project FCF Processing Costs Depreciation/ Depletion NOI NOPAT Plus: Depreciation b. NPV c. Year 2011 2012 2013 2014 2015 NPV To solve for equivalent growth rate, use the following: Year 2011 2012 2013 2014 2015 Expected Price Revenues NPV Difference Use Solver. Set difference to zero by changing growth rate cell (yellow highlighted) Project FCF Document Preview: Exercise 11-6
Project FCF
Risk free rate
years
NPV
Given
Initial investment
Solution Legend
= Value given in problem
= Formula/Calculation/Analysis required
= Goal Seek or Solver cell
= Crystal Ball Input
= Crystal Ball Output
= Qualitative analysis or Short answer required
PROBLEM 11-6
Forward Price Curve
a.
Processing Costs
Plus: Depreciation
Depreciation/
Depletion
Year
b.
c.
Expected Prices per Ounce
Gold Price/Ounce
Life of project
Cost/ton for processing
Revenues
NOI
NOPAT
Tax rate
WACC
Total PCs scrapped
units
PCs scrapped per year
ounce per ton
Gold content
pounds
Growth in gold prices
Tons of scrap per year
Current price of gold
per ounce
Electronic scrap per PC
Expected Price
To solve for equivalent growth rate, use the following:
Difference
Solution
$450,000.00
1000000.00
6.00
$0.33
1.00
3.00
5.00
200000.00
600.00
2000.00
$592.80
$67.50
0.30
0.05
0.11
0.07
2011.00
$679.40
$634.30
1.00
2012.00
1.00
$715.10
$678.70
1.00
2013.00
1.00
$750.60
$726.21
1.00
2014.00
1.00
$786.90
$777.04
1.00
2015.00
1.00
$822.80
$831.43
1.00
2011.00
2012.00
2013.00
2014.00
2015.00
2011.00
2012.00
2013.00
2014.00
2015.00
2011.00
2012.00
2013.00
2014.00
2015.00
Use Solver. Set difference to zero by changing growth rate cell (yellow highlighted)
Exercise 11-6
Project FCF
Risk free rate
years
NPV
Given
Initial investment
Solution Legend
= Value given in problem
= Formula/Calculation/Analysis required
= Goal Seek or Solver cell
= Crystal Ball Input
= Crystal Ball Output
= Qualitative analysis or Short answer required
PROBLEM 11-6
Forward Price Curve
a.
Processing Costs
Plus: Depreciation
Depreciation/
Depletion
Year
b.
c.
Expected Prices per Ounce
Gold Price/Ounce
Life of project
Cost/ton for processing
Revenues
NOI
NOPAT
Tax rate
WACC
Total PCs scrapped
units
PCs scrapped per year
ounce per ton
Gold content
pounds
Growth in gold… Attachments: Q.-Attachment….xls View less » Se…
