PG Case Calculations Worked

 Year  Y ear 0

 OPTION 1

Operating Operatin g Revenue COGS

2008

2,000,000

Gross Margin

Expenses SDA Marketing Depreiation Depreiation Deve!op"ent Cost

4,000,000 1,00,000

EBIT ta% &40'( Net earnings

###

Canni*i!i+ation

44,000,000 24,000,000

44,000,000 24,000,000

20,000,000

20,000,000

1,000,000 2,000,000 800,000

### ### 1,280,000 $

16,200,000 ),480,000

15,720,000 ),288,000

9,720,000

9,432,000

2,-00,000

.et /orking Capita! Rev.C8 3ange

FCF NPV I

2009

,01,)24 02)

,00,000 ,00,000 ,00,000

,00,000 $

&,00,000(   &18,)80 &18,)80,000 ,000((

10,-12,0 10,-12,000 00

2010

2011

2012   4,000,000

44,000,000 24,000,000

44,000,000 24,000,000

44,000,000 24,000,000

20,000,000

20,000,000

20,000,000

1,000,000 2,000,000 -)8,000 $

1,000,000 2,000,000 4)0,800 $

1,000,000 2,000,000 4)0,800 $

16,232,000 ),492,800

16,539,200 ),)1,)80

16,539,200 ),)1,)80

9,739,200

9,923,520

9,923,520

,00,000 $

,00,000 $

,00,000 $

10,0-,200

10,84,20

10,84,20

Depreiation 020

02

019

012

012

 Year 0

 OPTION 2

Operating Revenue COGS

,20,000

Gross Margin Expenses SDA Marketing Depreiation Deve!op"ent Cost

4,000,000 1,00,000

EBIT ta% &40'(

2009

)8,20,000 9,000,000

)8,20,000 9,000,000

29,20,000

29,20,000

1,000,000 ,00,000 800,000

### ### 1,280,000 $

23,950,000 23,470,000 9,80,000 9,88,000

Net earnings

###

Canni*i!i+ation

14,370,000

14,0!2,000

8,12,00

.et /orking Capita! Rev.C8 3ange FCF NPV I

2008

,441,948 0219

8,1,20 ,00,000

8,1,20 $

&,00,000(   &28,842,00(

1,)2,000

2010

2011

2012   4,000,000

)8,20,000 9,000,000

)8,20,000 9,000,000

)8,20,000 9,000,000

29,20,000

29,20,000

29,20,000

1,000,000 ,00,000 -)8,000 $

1,000,000 ,00,000 4)0,800 $

1,000,000 ,00,000 4)0,800 $

23,9!2,000 24,2!9,200 9,92,800 9,-1,)80

24,2!9,200 9,-1,)80

14,3!9,200

14,573,520

14,573,520

8,1,20 $

8,1,20 $

8,1,20 $

1,1-,200

1,04,20

1,04,20

Depreiation 020

02

019

012

012

 Year 0

 OPTION 3

Operating Revenue COGS

1,000,000

Gross Margin Expenses SDA Marketing Depreiation Deve!op"ent Cost

4,000,000 1,00,000

EBIT ta% &40'( Net earnings

###

Canni*i!i+ation

2009

2,000,000 12,000,000

2,000,000 12,000,000

11,000,000

11,000,000

1,000,000 1,000,000 800,000

### ### 1,280,000 $

!,200,000 ,280,000

7,720,000 ,088,000

4,920,000

4,632,000

10,00,000

.et /orking Capita! Rev.C8 3ange FCF NPV  I

2008

&128,8-( 0144

2,8-,000 ,00,000

2,8-,000 $

&,00,000(   &9,80,000(

,912,000

2010

2011

2012   4,000,000

2,000,000 12,000,000

2,000,000 12,000,000

2,000,000 12,000,000

11,000,000

11,000,000

11,000,000

1,000,000 1,000,000 -)8,000 $

1,000,000 1,000,000 4)0,800 $

1,000,000 1,000,000 4)0,800 $

!,232,000 ,292,800

!,539,200 ,41,)80

!,539,200 ,41,)80

4,939,200

5,123,520

5,123,520

2,8-,000 $

2,8-,000 $

2,8-,000 $

,-0-,200

,84,20

,84,20

Depreiation 020

02

019

012

012

"PTI"N 1 NPV I

"PTI"N 2

,01,)28

,441,94-9)

24'

2'

"PTI"N 3   &128,8-490( 1'