I have a midterm on the same day as this assignmen that I can'r

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I have a midterm on the same day as this assignmen that I can'r


PowerPoint Presentation Final Individual Assessment: IVTL case Financial Data and Analysis Here are the requirements for the IVTL final case submission. I have simplified the analysis for you and did the basic calculations for you. I want you to use this supplied data and case to answer the requirements below. Ignore the Data paragraph at the top of page 5 of the case. The Assumptions are the only relevant section on page 5 as I have completed the data analysis for you. Requirements: Briefly summarize the case situation and strategic importance of the project. (5 marks) Assess the quality of the net present value (NPV) analysis given (calculated for you using WACC and IRR). Prepare a payback period analysis using this information, as well. Do you believe the forecast is optimistic, reasonable or pessimistic. (10 marks) Prepare the ratios on page 8 of the case for IVTL for 2017/2018 through 2021/2022 in chart format. (10 marks) Compare and assess the ratios in Requirement 3 to Exhibit 5 industry standards and bank covenants over the forecast period. Is IVTL a good candidate for a loan? Why or why not? (5 marks) State with reasons why you would accept or reject the project. (5 marks) The report should be completed in 5 pages excluding a cover page. Due: April 13, 2023. A hard-copy submission is required. Capital Expenditure Amounts and Financing Deposit required by banks Cash Project Income Statement Balance Sheet Project Forecast Net Present Value Analysis (Millions) Minus for WC needs by year 250.89 Net Present Value (Millions) Ratio Calculations ($ millions) – prepare for all years in the forecast Appendix Working Capital Analysis See the NPV analysis Cash on deposit Schedule TN-IV Cost of Project and Means of Finance (₹ Millions) Project Cost Year 0 Particulars Fiscal Year 2016/17 Basis Land and Land Development 13.20 Building and Civil Works 32.60 Plant and Machinery 232.20 Miscellaneous Fixed Assets 116.70 Preliminary and Pre-Operative Expenses 18.10 Interest during Construction 1.50 Contingency 19.74 Capital Expenditure 434.04 Margin Money WC FY 2017/18 121.92 Total Project Cost 555.95 Means of Finance Particulars FY 2016/17 Equity Share Capital Balancing Figure 255.95 Long-Term Debt 300.00 Total Means of Finance Total Project Cost 555.95 Source: Created by the author. Schedule TN-IV Cost of Project and Means of Finance (₹ Millions) Project Cost Year 0 Particulars Fiscal Year2016/17 Basis Land and Land Development 13.20 Building and Civil Works 32.60 Plant and Machinery 232.20 Miscellaneous Fixed Assets 116.70 Preliminary and Pre-Operative Expenses 18.10 Interest during Construction 1.50 Contingency 19.74 Capital Expenditure 434.04 Margin Money WC FY 2017/18121.92 Total Project Cost 555.95 Means of Finance Particulars FY2016/17 Equity Share Capital Balancing Figure255.95 Long-Term Debt 300.00 Total Means of Finance Total Project Cost555.95 Source: Created by the author. Schedule TN-VI Income Statement (₹ Millions) Fiscal Year 2017/18 2018/19 2019/20 2020/21 2021/22 Particulars Basis Sales Revenue Sales 1,593.95 2,028.67 2,322.51 2,616.34 2,644.52 Raw Material Consumption Cost Operating Expenses (OPEX) 1,195.46 1,521.50 1,741.88 1,962.26 1,983.39 Repairs and Maintenance OPEX 1.03 1.20 1.37 1.54 1.54 Power, Fuel, and Water OPEX 22.23 25.94 29.64 33.35 33.35 Material Handling and Transport OPEX 6.84 7.98 9.12 10.26 10.26 Other Manufacturing Expenses OPEX 37.62 43.89 50.16 56.43 56.43 Total Cost 1,263.18 1,600.51 1,832.17 2,063.83 2,084.96 Add Opening Stock of Work in Progress Working Capital (WC) - 17.38 21.92 25.02 28.12 Less Closing Stock of Work in Progress WC 17.38 21.92 25.02 28.12 28.41 Cost of Production 1,245.80 1,595.96 1,829.07 2,060.74 2,084.67 Add Opening Stock of Finished Goods WC - 117.49 145.22 164.26 183.30 Less Closing Stock of Finished Goods WC 117.49 145.22 164.26 183.30 185.04 Cost of Goods Sold (COGS) 1,128.31 1,568.24 1,810.03 2,041.69 2,082.93 Gross Profit Sales - COGS 465.64 460.44 512.48 574.65 561.58 Salaries OPEX 64.10 64.10 64.10 64.10 64.10 SG&A Expenses OPEX 23.20 23.20 23.20 23.20 23.20 Earnings before Interest, Tax, Depreciation, and Amortization 378.34 373.14 425.18 487.35 474.28 Depreciation OPEX 79.00 79.00 79.00 79.00 79.00 Operating Profit (Earnings before Interest and Tax) 299.34 294.14 346.18 408.35 395.28 Interest on Long-Term Debt Long-term Debt 36.00 32.40 25.20 18.00 9.00 Interest on Working Capital Loan WC 51.21 64.81 74.01 83.22 84.10 Profit Before Tax 212.14 196.92 246.96 307.13 302.18 Tax @ 30% Case, "Other Assumptions" 63.64 59.08 74.09 92.14 90.66 Profit after Tax 148.50 137.84 172.87 214.99 211.53 Note: SG&A = selling, general, and administrative expenses. Source: Created by the author. Schedule TN-VI Income Statement (₹ Millions) Fiscal Year 2017/182018/192019/202020/212021/22 Particulars Basis Sales Revenue Sales 1,593.95 2,028.67 2,322.51 2,616.34 2,644.52 Raw Material Consumption Cost Operating Expenses (OPEX)1,195.46 1,521.50 1,741.88 1,962.26 1,983.39 Repairs and Maintenance OPEX 1.03 1.20 1.37 1.54 1.54 Power, Fuel, and Water OPEX 22.23
Answered 1 days AfterApr 12, 2023

Answer To: I have a midterm on the same day as this assignmen that I can'r

Sandeep answered on Apr 13 2023
18 Votes
Ans 1
Case Situation of IVTL:
· IVTL was an Indian telecom company incorporated in 1989.
· It makes telecom equipment and OFC and implements projects to build telecom infrastructure.
· Manufacturing facilities are located at Dharuhera in Haryana, and Rajkot in Guj
arat.
· Sales Turnover: ₹ 25.510 billion (FY 2014-15) & Net Profit: ₹ 1.899 billion.
· CAGR (Sales Turnover): 89% over the last four years & CAGR (Net Profit): 75% over the last 4 years.
· Cash and cash equivalent of ₹ 1.358 billion and a Net worth of 9.324 billion as of March 31, 2015.
· The company never defaulted on the loan payments and enjoyed a credit rating (Excellent “AAA”).
· Project details:
· Setting up an OFC manufacturing plant at CEC, a subsidiary of IVTL to secure own assets in event of the Bankruptcy of the subsidiary.
· Installation capacity: 1,14,000 km of OFCs of different specifications.
· IVTL would begin the commissioning of the proposed project in April 2016 after the approval of the company’s top management.
· Project Duration: 1 Year (i.e., April 2016 to April 2017)
· The economic Life of the Project was estimated at five years as it was a high-technology product with a higher risk of obsolescence.
· Technical viability has been ascertained.
Strategic Importance of the IVTL project:
· The market size of the OFC industry – is ₹ 12 billion (FY-2014-15) and is estimated to reach - ₹ 28 billion. CAGR of 15% over the next 5 years.
· The government wanted to ensure retail broadband services should reach/be accessible to all households at affordable rates.
· The budget pegged for this exercise was ₹ 720 billion over the next 10 years.
· Network for Spectrum project for the defence sector & Digital India program aims to connect all villages in India through a telecom network, boosting demand for OFC infra.
· India is 2nd largest telecom market in the world, with 3rd largest population of Internet users.
· OFC registered a strong growth of 48% in FY014-14 (412,500 km) viz-a-viz FY 2013-14 (279,400km).
· A significant gap will arise in demand/Supply for OFC in India in the coming few years.
· Major players in the industry were Sterlite Technologies (31%), Finolex Cables (22%), Aksh Opti Fibre Ltd (12%), Paramount Comm. Ltd (10%), IVTL (7%) & Others (10%).
· India was on course to becoming a net exporter of OFC to the Rest of the world.
Ans 2.
Net Present Value (NPV)
· The sum of the present value of forecasted free cash flow (FCF) when discounted at the WACC of 14.7% which factors in the time value of money and gives weightage to the cost of all sources of raising finance (Debt, Equity, Preference, and others).
· Since NPV computed is...
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