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financial model, Corporate Finance
Think of any business you would like to open in Lebanon (from small to big project) and prepare a preliminary income statement from five to eight years maximim. Compute the expected sales, variable cost, fixed cost, depreciation by using the straight line method, $0 interest and taxes of 35%). So to finance your project, no debt will be issued and no interest charges too.
Get some basic computations for the capital spending (land, buildings, factories, PPE or property, plant and equipment, etc.). Assume zero salvage value for the capital spending. Straight-line depreciation method to be used and market value is equal to 20% if life of the project is 5 years and 10% if 8 years.
Get some basic computations for the working capital (you can compute it as a fixed percentage of net revenues of 15% to 20%).
Prepare three scenario analyses (basic, worst case and best case).
Prepare a sensitivity analysis by changing different assumptions, once at a time.
Prepare NPV break-even analysis (find Q and/or P) and Accounting Break-even analysis (find Q and/or P).
You are kindly requested to calculate the Accounting BE, the Cash BE, the Financial BE, a targeted NPV, the DOL, DFL, and DTL (found in the last three pages of chapter 11 which you are required to read).
Apply as well the most capital budgeting techinques learned from chapter 9 (accounting average return, payback period, discounted payback period, IRR, PI, NPV Profile, etc.)
The deadline for submitting this Project is on Wednesday, 20 of March 2013.
Posted Date: 3/17/2013 8:20:32 AM | Location : Lebanon
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