An enterprise plans to build a productive project to produce some urgently needed products in China. The construction period of the project is 2 years and the operation period is 7 years. It is estimated that the investment during the construction period is 8 million yuan (including the loan interest of 200,000 yuan during the construction period), forming all fixed assets. The service life of fixed assets is 10 year, and the residual value at the end of operation is 500,000 yuan, and depreciation is accrued according to the straight-line method.
In the first year of the construction period, the enterprise invested 3.8 million yuan in project capital, and in the second year of the construction period, it borrowed 4 million yuan from the local construction bank (excluding loan interest), with the loan interest rate of 65,438+00%. The project was put into production in the third year. In the year of production, another 2 million yuan was invested as working capital.
In normal years of operation, the annual sales revenue is 7 million yuan, the operating cost is 3 million yuan, the product sales tax and additional tax rate is 6%, the income tax rate is 33%, the annual total cost is 4 million yuan, and the industry benchmark rate of return is 10%.
In the first year of production, the production capacity is only 70% of the design capacity. In order to simplify the calculation, the sales revenue, operating cost and total cost of this year are estimated at 70% of the normal year. In the second year of production and the following years, the output reached the designed production capacity.
question
1. Data used to calculate VAT, surcharge and income tax.
2. Prepare all investment cash flow statements according to the format in Table 5-7.
3. Calculate the dynamic payback period and financial net present value of the project.
4. Calculate the financial internal rate of return of the project.
5. From the perspective of financial evaluation, analyze and explain the feasibility of the proposed project.
Date of trial operation during project construction.
1 2 3 4 5 6 7 8 9
produce
Load 70%100%100%100%100%.
1 cash
Exiled person
1. 1 sales
income
1.2 recovery rate
Residual value of fixed assets
1.3 liquidity recovery
2 cash
avoid
2. 1 investment in fixed assets
2.2 Working capital investment
2.3 operation
expense
2.4 Sales tax and
extra
2.5 Income tax
3 Net cash flow
4 discount coefficient IC =10% 0.9091.82640.75130.6830 0.6209 0.56450.51320.46650.46638+0.
5 Discounted net cash flow
quantity
6 Cumulative discounted net cash flow
Background material analysis
This case comprehensively examines the preparation of cash flow statement, focusing on the calculation and evaluation of dynamic profitability evaluation indicators such as internal rate of return, payback period and financial net present value in the financial evaluation of construction projects.
This case mainly solves the following four conceptual problems:
1. In the total cash flow statement of financial profitability analysis, fixed assets investment does not include loan interest during construction;
2. In the flow chart, there may be two situations to calculate the salvage value of recovered fixed assets: the service life is equal to the service life of fixed assets, then the salvage value of recovered fixed assets-the salvage value of recovered fixed assets is less than the service life of fixed assets, then the salvage value of recovered fixed assets-(service life-service life) × annual depreciation expense+salvage value.
3. Calculation method of dynamic profitability evaluation index in financial evaluation:
4. The financial internal rate of return of the project reflects the profitability of the funds occupied by the project, which is the main dynamic index to assess the profitability of the project. In financial evaluation, the financial internal rate of return (FIRR) of all investments or self-owned funds is compared with the industry benchmark rate of return ic. When FIRR≥ic, it can be considered that its profitability meets the requirements and is financially feasible.
Answer 1. Solution: Calculate sales tax and add and calculate income tax:
(1) Sales tax and surcharges in the operating period: sales tax and surcharges in the third year = sales revenue × sales tax and surcharges = 700× 70 %× 6% = 29.40 (ten thousand yuan).
Sales tax and surcharges in the 4th-9th year = 700× 100 %× 6% = 42.00 (ten thousand yuan)
(2) Operating period income tax: income tax = (sales revenue-sales tax and surcharges-total cost) × income tax rate =(490-29.40-280)×33%=59.60 (ten thousand yuan).
Income tax in the 4th-9th year =(700-42-400)×33%=85. 14 (ten thousand yuan).
2. Solution: According to the format in Table 5-7 and the following calculation data, the statement of total investment cash flow is compiled in Table 5-8.
(1) The service life of the project is 10 years, and the operation period is 7 years. Therefore, the residual value of fixed assets is calculated according to the following formula: annual depreciation = (original value-residual value of fixed assets) ÷ depreciation period =(800-500)÷ 10=75 (ten thousand yuan).
Residual value of fixed assets = annual depreciation expense × (service life of fixed assets-operating period)+residual value = 75× (10-7)+50 = 2.75 million yuan.
(2) Calculation of loan interest during the construction period: there is no loan during the construction period 1 year, and the loan in the second year of the construction period is 4 million yuan (ten thousand yuan).
Loan interest =(0+400÷2)× 10%=20 (ten thousand yuan)
Date of trial operation during project construction.
1 2 3 4 5 6 7 8 9
Production load is 70%100%100%100%100%
1 cash inflow 490.00 700.00 700.001175.00
1. 1 sales revenue 490.00 700.00 700.00
1.2 Residual value of fixed assets 275.00
1.3 Recovering working capital 200.00
2 Cash outflow 380 400 499.00 42714 427.14 427.14 427.14 427.65 438+04 427.65 438
2. 1 fixed assets investment 380 400
2.2 Working capital investment 200.00
2.3 Operating cost 210.00 300.00 300.00 300.00 300.00 300.00 300.00
2.4 Sales tax and surcharges 29.40 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00
2.5 income tax 59.60 85.14 85.14 85.14 85.14 85.
3 Net cash flow-380-400-9.00 272.86 272.86 272.86 272.86 747.86
4 Discount coefficient Friend =10% 0.9091.8264 0.75130.6830 0.6209 0.5645 0.51320.4665 0.46438+0.
5 Net discounted cash flow-345.46-330.56-6.76186.36169.42154.03140.03127.29 3/kloc-0
6 cumulative discount
Net cash flow-345.46-676.02-682.8-496.4-327.0-173.0-32.94 94.35+01.52.
3. Solution: According to the data in Table 5-8, calculate the dynamic payback period and financial net present value of the project according to the following formula.
Dynamic payback period of investment = (the year when the cumulative discounted net cash flow is positive-1)+ (the absolute value of the cumulative discounted net cash flow in the year before the positive year ÷ the discounted net cash flow in the positive year).
= (8-1)+(|1-32.94 | ÷127.29) = 7.26 (year)
As can be seen from Table 5-8, the NPV of this project is 411.52 (ten thousand yuan).
4. Solution: Prepare a cash flow statement, as shown in Table 5-9. The internal rate of return of the proposed project is calculated by trial calculation. The specific method and calculation process are as follows:
Date of trial operation during project construction.
1 2 3 4 5 6 7 8 9
produce
Load 70%100%100%100%100%.
1 cash
Inflow 490.00 700.00 700.00 700.001175
2 cash
Outflow: 380 400 499.00 427.14 427.14 427+04438.40088888885
3 Current net worth
Flowing direction of gold-380-400-9.00 272.86 272.86 272.86 272.86 2728888986
4 discount
Coefficient IC =10% 0.9091.82640.75130.6830 0.6209 0.56450.51320.46650.46638+0.
5 fold
Net cash price
Flow-345.46-330.56-6.76186.36169.42154.03140.03127.29 317.
6 accumulation
give a discount
Net cash flow-345.46-676.02-682.8-496.4-327.0-173.0-32.94 94.35+01.52.
7 discount
Coefficients I1= 20% 0.8333 0.6944 0.5787 0.4823 0.405438+09 0.33439 0.4338+0.2326 0.5788+0938.5938.59388888986
Net discounted cash flow is-316.65-277.76-5.21.60109.6695438+0.3876.1663.30088888886
9 accumulation
give a discount
Net cash flow-316.65-594.41599.6-468.0-358.4-267.0-l90.8-l27.417.59.
10 discount
Coefficient I2 = 21%0.8264 0.6830 0.5645 0.4665 0.3855 0.35438+086 0.2633 0.438+076 0.6799.
1 1 discounted net cash flow-314.03-273.20-5.08127.29105.18 86.937/kloc-0.
12 cumulative discounted net cash flow-314.03-587.23-592.3-465.0-359.8-272.9-201-l 41.7-6.65438+
(1) First, set i 1 = 20%, take i 1 as the set discount rate, and calculate the discount coefficient of each year. Calculate the discounted net cash flow and accumulated discounted net cash flow in each year by using the cash flow expansion table, so as to obtain the financial net present value FNPV 1, as shown in Table 5-9.
(2) Then let i2 = 2 1%, take i2 as the set discount rate, and calculate the discount coefficient of each year. Similarly, the expanded cash flow statement is used to calculate the discounted net cash flow and accumulated discounted net cash flow in each year, thus obtaining the financial net present value FNPV 1, as shown in Table 5-9.
(3) if the test results meet: fnpv1>; 0, FNPV2 & lt0, and meet the accuracy requirements, the financial internal rate of return FIRR of the proposed project can be calculated by interpolation method.
As can be seen from Table 5-9, when I 1 = 20%, FNPV 1= 17.59.
When I2 = 2 1%, FNPV2=6. 16.
The internal rate of return (FIRR) of the proposed project can be calculated by interpolation.
That is, firr = I1+(I2-I1) × [fnpv1÷f (| fnpv1|| fnpv2 |)] = 20%+(21%).
5. solution: evaluate the feasibility of the project from the perspective of financial evaluation: according to the calculation results, the net present value of the project = 465,438+065,438+0.52 million yuan > 0; Internal rate of return = 20.74% > industry benchmark return10%; Exceeding the industry benchmark income level, the project is feasible.