This presentation provides an insight into techniques which can help business undertake financially viable projects using Capital Budgeting tools like Net Present Value, Internal Rate of Return and Discounted Pay-back Period. Though the scope of this presentation involves:- - Mutually exclusive projects, - Indivisible Projects, and - Equal duration projects More research work is being undertaken for projects of different duration. Moreover, I'll share more about calculation of Weighted Average cost of capital, ROI and Risk-adjusted ROI in the upcoming presentations. If you wish to add comments or need to ask questions, please feel free.

2. I. Objectives and Aim
II. Key Questions
a) 2.1. Understand the needs of capital outlay?
b) 2.2. Capital outlay funding?
c) 2.3. Assumptions and factors to be considered?
d) 2.4. Stakeholder reporting?
e) 2.5. Key Performance Indicators?
III. Project Selection Criteria
IV. Projects Undertaken
V. Calculation of Discounted Cash Flows
VI. Ranking the Projects
a. NPV
b. Discounted Cash Flows
c. IRR
VII. Appendix: Country Wise Calculation
Contents:

3. I. Objectives and Aim
II. Key Questions
a) 2.1. Understand the needs of capital outlay?
b) 2.2. Capital outlay funding?
c) 2.3. Assumptions and factors to be considered?
d) 2.4. Stakeholder reporting?
e) 2.5. Key Performance Indicators?
III. Project Selection Criteria
IV. Projects Undertaken
V. Calculation of Discounted Cash Flows
VI. Ranking the Projects
a. NPV
b. Discounted Cash Flows
c. IRR
VII. Appendix: Country Wise Calculation
Contents:

4. - Understand the capital expenditure requirement of an organization
- Identify the areas impacted
- Non-monetary factors of undertaking a project
- Help management in understanding the need of a project and importance in terms of cash flows
- Devise ways of ranking the projects and linking with limited budget to showcase Capital Rationing
- Present the usage of tools like NPV, IRR, discounted pay back to select profitable and viable projects
Identify needs and prepare ground for capital layouts
1. Objectives and Aim
AIM
Manage Portfolio of Projects supported by
Capital Budgeting TechniquesNow
Next

5. I. Objectives and Aim
II. Key Questions
a) 2.1. Understand the needs of capital outlay?
b) 2.2. Capital outlay funding?
c) 2.3. Assumptions and factors to be considered?
d) 2.4. Stakeholder reporting?
e) 2.5. Key Performance Indicators?
III. Project Selection Criteria
IV. Projects Undertaken
V. Calculation of Discounted Cash Flows
VI. Ranking the Projects
a. NPV
b. Discounted Cash Flows
c. IRR
VII. Appendix: Country Wise Calculation
Contents:

6. • 2.1. Understand the needs of capital outlay?
20XX 20XX 20XX 20XX 20XX 20XX
Routine
Improve Control
29In million USD 32 36 37 37 36
Total Loading
Routine
Routine – After Improvement
40
20XX
POSITIVE MANAGEMENT
- Projected Cash flows on
undertaking system by
system replacement and
upgrade over a span on 7
years
- Various system related to
Production, Finance,
Logistics, Import & Export,
HRM, Supply chain
- Cash Flow increment on
optimization of working
hours, workforce,
Business to Business
relations, Customer
relations

7. • 2.2. Capital outlay funding?
Following this considered while deciding the funding of the major capital outlays:-
- Depreciation fund – fund created to replace the existing legacy systems. Discounted at the real interest rate
(real interest rate = 1+Nominal Interest Rate/1+Inflation rate). It is done in order to reach the real value of the
depreciation fund
- Reserves and Surplus – Management decided to allocate 20% of the available reserves and surplus to carry out
new projects
- Loans and Advances – In case of a shortfall, company can bring in loans from the Parent company or the group
company or may ask the regional HQ to charge EMI after converting it into a loan, mostly at 0% interest

8. • 2.3. Assumptions and factors to be considered?
- Discounting factor (Cost of Capital) – Projected Net Cash inflows (Total Monthly Cash Inflows – Total Monthly
Cash Outflows) to be discounted every month at real interest rate. Real Interest rate = Singapore Interbank
Offer rate/ Singapore CPI (courtesy: www.singstat.gov.sg)
o SIBOR = 1 year @ 1.06181% effective 12 Mar 2015
o Inflation rate = -0.4 % for Jan 2015, hence taken as 0
o Company defined discount rate = SIBOR + 0.93819%= 2% (real discounting rate) for 7 years
- Projected minimum life of a system = 7 years from the date of implementation
- Depreciation = 25% on the written down value basis over the 7 years.
- Asset with remaining amount to be sold at the remaining value, hence not taken into consideration
- Income tax rate on inflows = 17% per annum (as per Singapore Income Tax)
- GST – No GST on export services ( as per Singapore Income Tax)

9. • 2.3. Assumptions and factors to be considered?
- Calculation of Cash Outflow – Following are the guidelines about what to consider as Outflows:-
o Cost of Server and Operating system to be taken as under the ownership of Singapore entity (Regional
Head Quarters or RHQ) to be leased to Other entities on Operating Lease basis. Hence Singapore RHQ can
claim Depreciation
o Cost of Server Set up to be charged from each entity under Service Charges
o Cost of Application – shall be treated as under the ownership of respective entity located in different
regions
* All Outflows are incurred in the year 0, hence discount factor = 1
** Outflows are in Singapore Dollars
- Calculation of Cash Inflows – Following are the guidelines to consider the inflows:-
o Year 1 = (App.+10%)+(license@150USD/user)+1st year Infra lease + Infra set up service charges
o Year 2 – 7 = (App.*.15)+(lic. @150/user)+lease rental for infra + Infra maintenance@5000 USD/year
* Outflows are in Singapore Dollars

10. • 2.3. Assumptions and factors to be considered?
- Lease Calculation – Total cost of Assets leased/Discounting Factor
o Total Cost of Assets = Server Cost + Operating System Cost
o Discounting Factor = SIBOR + 3.93819% = 5% for 7 years, that is, 5.786 (Inflation adjusted)
• Management Decision to recover the server and OS cost earlier as it bought from Third Party outside the
group companies
- Calculation of Internal Rate of Return using Interpolation method:-
Formula = Low Rate + ((NPV at Low Rate/NPV at Low Rate - NPV at High Rate) *(Difference between High Rate and Low Rate))
- Project Ranking Methods – Projects are ranked on three methods:-
- Net Present Value – Higher the NPV, Higher the rank
- Discounted pay-back period – Lower the pay back period, higher the rank
- Internal Rate of Return – Higher the rate, Higher the rank

11. - Stakeholders shall be informed about the following:-
- Cash outflow and Projected inflows
- Expected ROI of the project
- Expected NPV of the project
- Key Performance Indicators
- Status of the project progress
- Scope of the system
A progress status report shall be sent out every fortnightly indicating progress of the project based on EVM (Earned
Value Management) measuring scope, costs and schedule, as follows:-
- schedule variance = Earned Value – planned Value
- Schedule Performance Index = Earned Value/Planned value
- Cost Variance = Earned Value – Actual costs
- Cost Performance Index = Earned Value/ Actual Costs
- Estimate At Completion =Actual Costs + (Budget At completion – Earned Value)/Cost Performance Index
- Estimate To Complete = Estimate at completion – Actual Costs
- To-Complete Performance Index = Budget At Completion – Earned Value/ Estimate At Completion – Actual costs
• 2.4. Stakeholder reporting

12. No. Description Current Condition Target
1. Lead Time Report
VAT Report
Withholding tax Report
AP Balance Report
AR Balance Report
Inventory Balance Report
Financial Report (monthly closing)
Financial Report (Quarterly closing)
Budget Report
Sale Report
3 WDS
3 WDS
1 WD
1 WD
3 WDS
7 WDS
9 WDS
5 WDS
1 WD
2 WDS
2 WDS
½ WDS
½ WDS
2 WDS
6 WDS
7 WDS
4 WDS
½ WDS
2. Lead Time Processing
AP Voucher Payments
Check Withholding tax to correct Check VAT
record to correct
Fixed assets
CKD Raw material Cost
14 WDS
2 WDS
7 WDS
1WD
4 WDS
10 WDS
1 WD
4 WDS
½ WDS
2½ WDS
• 2.5. Key Performance Indicators – Finance 1/5

13. No. Description Current Condition Target
1.
2.
3.
4.
5.
Lead Time Processing
Payment to Supplier
Local Payments
(Cheque and Electronics Transfer (GCMS))
Overseas Payments
(Electronics Transfer)
Financial Receive
Receive for sale (Local)
Receive for sale (Overseas)
Bank module
Reconcile Bank (monthly closing)
billing
Billing to supplier
Payment of petty cash
5 WDS
5 WDS
1 WD
2 WDS
2 WDS
3 WDS
3 WDS
4 WDS
4 WDS
1 WD
2 WDS
2 WDS
2 WDS
2 WDS
• 2.5. Key Performance Indicators – Finance 2/5

14. No. Description Current Condition Target
1. Sale order Delivery
1.1 Text file order & forecast
1.2 List of part delivery TYM(OEM)
1.3 List of part (Spare parts)
1.4 Budget ‘s forecast
1.5 Graph %
(compare budget & sale last year + this year)
1.6 Compare OEM from order (monthly)
1.7 Compare Spareparts from order (monthly)
1.8 Compare YEVN from order montly
1.9 Compare YEID from order monthly
1.10 Graph %
1.1 30 min.
1.2 150 min.
1.3
1.4 270 min.
1.5 30 min.
1.6
1.7
1.8 240 min.
1.9
1.10
1.1 Out of Scope
1.2 90 min.
1.3
1.4 Out of Scope
1.5 Out of Scope
1.6
1.7
1.8 Out of Scope
1.9
1.10
2. Sale Export (Invoice –Packing list)
(For process + report)
2.1 60 min. 2.1 30 min.
3. Text Invoice Report
3.1 Invoice TYM (key excel file)
(key system formular 4)
3.2 Invoice YEVN (by excell file )
3.3 Invoice YEID (by excell file)
3.4 Invoice YMAP (by excell file)
3.1 key excell file 30 min.
key formular 20 min
3.2 key excell file 20 min.
key formular 30 min.
3.3
3.4 key excell file 20 min
key fourmulat 30 min.
check & key system I-Global
=25 min.
3.1 40 min.
3.2 40 min.
3.3
3.4 20 min.
• 2.5. Key Performance Indicators – Sales 3/5

15. No. Description Current Condition Target
4. Sale Confirmation
4.1 Sale Confirmation YEVN
4.2 Sale Confirmation YEID
4.1 30 min.
4.2 30 min.
4.1 15 min.
4.2 15 min.
5. Sale by product & Model (compare with budget)
5.1 Report by Model (TYM) example 52B ,2S5
5.2 Report by product YEVN
5.3 Report by product YEID
5.1 20 min.
5.2 15 min.
5.3
5.1 10 min.
5.2 10 min.
5.3
6. Export by Customer
6.1 shipment schedule of YEVN
6.2 shipment schedule of YEID
6.3 shipment schedule of YMAP
6.4 shipment schedule of YEJP
6.1 40 min.
6.2 30 min.
6.3 30 min.
6.4 20 min.
6.1 20 min.
6.2 20 min.
6.3 20 min.
6.4 15 min.
7. Sale Volume (compare update with order & forecast
previous)
7.1 Sale Volume TYM (OEM)
7.2 Sale Volume Spare Parts
7.3 Sale Volume YEVN
7.4 Sale Volume YEID
7.5 Sale Volume YMAP
7.1
7.2
7.3 90 min.
7.4
7.5
7.1
7.2
7.3 Out of Scope
7.4
7.5
• 2.5. Key Performance Indicators – Sales 4/5

16. No. Description Current Condition Target
8. KPI “Delivery performance “ monthly.
8.1 Delivery report OEM
8.2 Delivery report Spare part
8.3 Delivery report YEVN
8.4 Delivery report YEID
8.1
8.2
8.3 90 min.
8.4
8.1
8.2
8.3 60min.
8.4
No. Description Current Condition Target
1. Lead time of Report
1.1 Purchasing report
- Monthly Purchased amount
- Summary of Delivery performance report
1.2 Inventory report
- High Value items
- Items separated by category
1 WD
1 WD
1 HR
1 HR
• 2.5 Key Performance Indicators – Sales 5/5
• 5. Key Performance Indicators – Purchasing and Store

17. I. Objectives and Aim
II. Key Questions
a) 2.1. Understand the needs of capital outlay?
b) 2.2. Capital outlay funding?
c) 2.3. Assumptions and factors to be considered?
d) 2.4. Stakeholder reporting?
e) 2.5. Key Performance Indicators?
III. Project Selection Criteria
IV. Projects Undertaken
V. Calculation of Discounted Cash Flows
VI. Ranking the Projects
a. NPV
b. Discounted Cash Flows
c. IRR
VII. Appendix: Country Wise Calculation
Contents:

18. • 3. Project Selection Criteria 1/2

19. • 4. Project Selection Criteria 2/2
Based on above mentioned criteria's, various project in different countries were selected. Please see the
next slide giving details of the countries and respective projects

20. I. Objectives and Aim
II. Key Questions
a) 2.1. Understand the needs of capital outlay?
b) 2.2. Capital outlay funding?
c) 2.3. Assumptions and factors to be considered?
d) 2.4. Stakeholder reporting?
e) 2.5. Key Performance Indicators?
III. Project Selection Criteria
IV. Projects Undertaken
V. Calculation of Discounted Cash Flows
VI. Ranking the Projects
a. NPV
b. Discounted Cash Flows
c. IRR
VII. Appendix: Country Wise Calculation
Contents:

21. • 4. Projects Undertaken
- Several Project Undertaken
- Region Covered : Asia
- Cash Flow increment on optimization of working hours,
workforce, Business to Business relations, Customer
relations

22. I. Objectives and Aim
II. Key Questions
a) 2.1. Understand the needs of capital outlay?
b) 2.2. Capital outlay funding?
c) 2.3. Assumptions and factors to be considered?
d) 2.4. Stakeholder reporting?
e) 2.5. Key Performance Indicators?
III. Project Selection Criteria
IV. Projects Undertaken
V. Calculation of Discounted Cash Flows
VI. Ranking the Projects
a. NPV
b. Discounted Cash Flows
c. IRR
VII. Appendix: Country Wise Calculation
Contents:

23. • 5. Calculation of Discounted Cash Flows 1/3
Region India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
No. of Projects 1 2 1 2 3 1 3 2
Cash Outflow
No. of Users 55 175 40 10 30 5 20 80
- licences
-- Microsoft (@1300/User) $71,500.00 $227,500.00 $52,000.00 $13,000.00 $39,000.00 $6,500.00 $26,000.00 $104,000.00
--citrix (@265/user) $14,575.00 $46,375.00 $10,600.00 $2,650.00 $7,950.00 $1,325.00 $5,300.00 $21,200.00
-- SQL (@155/User) $8,525.00 $27,125.00 $6,200.00 $1,550.00 $4,650.00 $775.00 $3,100.00 $12,400.00
-- AD (@85/User) $4,675.00 $14,875.00 $3,400.00 $850.00 $2,550.00 $425.00 $1,700.00 $6,800.00
- Total License cost $99,275.00 $315,875.00 $72,200.00 $18,050.00 $54,150.00 $9,025.00 $36,100.00 $144,400.00
- Infrastructure
-- Server Size (in Gigabytes) 300 500 250 250 250 200 500 750
-- Server (@250/Gigabytes) $75,000.00 $125,000.00 $62,500.00 $62,500.00 $62,500.00 $50,000.00 $125,000.00 $187,500.00
-- OS $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00
-- Server set up mandays 60 90 30 30 30 10 45 60
-- Set up cost (@255/manday) $15,300.00 $22,950.00 $7,650.00 $7,650.00 $7,650.00 $2,550.00 $11,475.00 $15,300.00
Total Infra cost $95,300.00 $152,950.00 $75,150.00 $75,150.00 $75,150.00 $57,550.00 $141,475.00 $207,800.00
- Application
-- Configuration Mandays 12 20 10 5 15 3 20 30
-- Configuration (@175/Manday) $2,100.00 $3,500.00 $1,750.00 $875.00 $2,625.00 $525.00 $3,500.00 $5,250.00
-- Development Mandays 185 225 125 88 120 65 50 300
-- Development (@175/Manday) $32,375.00 $39,375.00 $21,875.00 $15,400.00 $21,000.00 $11,375.00 $8,750.00 $52,500.00
-- Testing & Training Mandays 14 14 20 10 35 14 20 30
-- Test & Train (@175/Manday) $2,450.00 $2,450.00 $3,500.00 $1,750.00 $6,125.00 $2,450.00 $3,500.00 $5,250.00
-- Deployment Mandays 25 30 22 10 29 10 18 33
-- Depolyment (@175/Manday) $4,375.00 $5,250.00 $3,850.00 $1,750.00 $5,075.00 $1,750.00 $3,150.00 $5,775.00
Total Application cost $41,300.00 $50,575.00 $30,975.00 $19,775.00 $34,825.00 $16,100.00 $18,900.00 $68,775.00
Total Cost (A) $235,875.00 $519,400.00 $178,325.00 $112,975.00 $164,125.00 $82,675.00 $196,475.00 $420,975.00
Singapore Dollars (SGD) rounded to 2 Decimal Places

24. Singapore Dollars (SGD) rounded to 2 Decimal Places
Cash Inflows After Tax (CFAT)
-Year 1 $103,456.48 $152,588.03 $74,876.09 $52,456.09 $79,536.09 $38,565.70 $67,183.03 $170,609.96
-Year 2 $33,271.48 $61,304.28 $27,312.34 $21,132.34 $26,389.84 $17,670.70 $33,303.03 $60,586.21
-Year 3 $33,271.48 $61,304.28 $27,312.34 $21,132.34 $26,389.84 $17,670.70 $33,303.03 $60,586.21
-Year 4 $33,271.48 $61,304.28 $27,312.34 $21,132.34 $26,389.84 $17,670.70 $33,303.03 $60,586.21
-Year 5 $33,271.48 $61,304.28 $27,312.34 $21,132.34 $26,389.84 $17,670.70 $33,303.03 $60,586.21
-Year 6 $33,271.48 $61,304.28 $27,312.34 $21,132.34 $26,389.84 $17,670.70 $33,303.03 $60,586.21
-Year 7 $33,271.48 $61,304.28 $27,312.34 $21,132.34 $26,389.84 $17,670.70 $33,303.03 $60,586.21
Total Inflows $303,085.34 $520,413.68 $238,750.13 $179,250.13 $237,875.13 $144,589.92 $267,001.18 $534,127.23
Less Dep. $69,321.29 $112,647.09 $58,489.84 $58,489.84 $58,489.84 $47,658.39 $112,647.09 $166,804.35
Income after Dep. Before tax $233,764.05 $407,766.59 $180,260.30 $120,760.30 $179,385.30 $96,931.54 $154,354.09 $367,322.88
Less Tax @17% $39,739.89 $69,320.32 $30,644.25 $20,529.25 $30,495.50 $16,478.36 $26,240.20 $62,444.89
Income after tax and Dep. $194,024.17 $338,446.27 $149,616.05 $100,231.05 $148,889.80 $80,453.18 $128,113.89 $304,877.99
Depreciation (add back) $69,321.29 $112,647.09 $58,489.84 $58,489.84 $58,489.84 $47,658.39 $112,647.09 $166,804.35
CFAT $263,345.45 $451,093.36 $208,105.88 $158,720.88 $207,379.63 $128,111.56 $240,760.99 $471,682.34
Total Discounted Cash Flows
for 7yrs @PVF 2%
$246,966.73 $421,676.37 $194,809.29 $148,396.95 $194,396.47 $119,576.81 $224,549.69 $441,763.05
Net Present Value $11,091.73 -$97,723.63 $16,484.29 $35,421.95 $30,271.47 $36,901.81 $28,074.69 $20,788.05
• 5. Calculation of Discounted Cash Flows 2/3

25. Singapore Dollars (SGD) rounded to 2 Decimal Places
India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
-- Server (@250/Gigabytes) $75,000.00 $125,000.00 $62,500.00 $62,500.00 $62,500.00 $50,000.00 $125,000.00 $187,500.00
-- OS $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00
Total (A) $80,000.00 $130,000.00 $67,500.00 $67,500.00 $67,500.00 $55,000.00 $130,000.00 $192,500.00
Dis. fac. 5% for 7yrs (B) 5.786 5.786 5.786 5.786 5.786 5.786 5.786 5.786
Yearly lease (A/B) $13,826.48 $22,468.03 $11,666.09 $11,666.09 $11,666.09 $9,505.70 $22,468.03 $33,269.96
Lease over 7years $96,785.34 $157,276.18 $81,662.63 $81,662.63 $81,662.63 $66,539.92 $157,276.18 $232,889.73
Lease Calculation
India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
Cost Of Server and Operating System$80,000.00 $130,000.00 $67,500.00 $67,500.00 $67,500.00 $55,000.00 $130,000.00 $192,500.00
Year 1 $20,000.00 $32,500.00 $16,875.00 $16,875.00 $16,875.00 $13,750.00 $32,500.00 $48,125.00
Year 2 $15,000.00 $24,375.00 $12,656.25 $12,656.25 $12,656.25 $10,312.50 $24,375.00 $36,093.75
Year 3 $11,250.00 $18,281.25 $9,492.19 $9,492.19 $9,492.19 $7,734.38 $18,281.25 $27,070.31
Year 4 $8,437.50 $13,710.94 $7,119.14 $7,119.14 $7,119.14 $5,800.78 $13,710.94 $20,302.73
Year 5 $6,328.13 $10,283.20 $5,339.36 $5,339.36 $5,339.36 $4,350.59 $10,283.20 $15,227.05
Year 6 $4,746.09 $7,712.40 $4,004.52 $4,004.52 $4,004.52 $3,262.94 $7,712.40 $11,420.29
Year 7 $3,559.57 $5,784.30 $3,003.39 $3,003.39 $3,003.39 $2,447.20 $5,784.30 $8,565.22
Total Sum $69,321.29 $112,647.09 $58,489.84 $58,489.84 $58,489.84 $47,658.39 $112,647.09 $166,804.35
Depreciation Schedule
• 5. Calculation of Discounted Cash Flows 3/3

26. I. Objectives and Aim
II. Key Questions
a) 2.1. Understand the needs of capital outlay?
b) 2.2. Capital outlay funding?
c) 2.3. Assumptions and factors to be considered?
d) 2.4. Stakeholder reporting?
e) 2.5. Key Performance Indicators?
III. Project Selection Criteria
IV. Projects Undertaken
V. Calculation of Discounted Cash Flows
VI. Ranking the Projects
a. NPV
b. Discounted Cash Flows
c. IRR
VII. Appendix: Country Wise Calculation
Contents:

27. • Based on NPV
• Based on Discounted Pay Back Period
• Based on Internal Rate of Return (IRR)
• 7. Ranking the Projects

28. • 7. Net Present Value – In Brief

29. • 7. Ranking the Projects –NPV 1/3
India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
NPV $59,774.90 ($516,662.38) $97,935.33 $217,202.15 $166,649.87 $224,236.79 $210,856.24 $128,250.85
Ranking 7 8 6 2 4 1 3 5
On the NPV raking basis, a company can select the projects starting with the project ranked higher.
For example a company has SGD 1 Million at its disposal for various project.
(assuming projects to be mutually exclusive and indivisible):
Project Rank Capital Outlay Budget Available Remaining
Cambodia 1 $82,675.00 $1,000,000.00 $917,325.00
Philippines 2 $112,975.00 $917,325.00 $804,350.00
Vietnam 3 $196,475.00 $804,350.00 $607,875.00
Pakistan 4 $164,125.00 $607,875.00 $443,750.00
Australia 5 $420,975.00 $443,750 $22,775.00
5 of the 7 (profitable) can be selected based on NPV ranking for the present year
India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
Outflow $235,875.00 $519,400.00 $178,325.00 $112,975.00 $164,125.00 $82,675.00 $196,475.00 $420,975.00

30. • 7. Discounted Pay Back Period– In Brief

31. India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
Outflow $235,875.00 $519,400.00 $178,325.00 $112,975.00 $164,125.00 $82,675.00 $196,475.00 $420,975.00
India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
Year 1 $148,356.49 $389,818.57 $114,583.92 $67,477.64 $96,591.96 $49,001.44 $136,389.79 $274,124.49
Year 2 $119,362.52 $336,929.01 $90,726.93 $48,550.88 $73,470.92 $33,219.23 $105,838.79 $219,892.95
Year 3 $91,537.79 $286,052.68 $67,844.60 $30,502.09 $51,310.10 $18,159.48 $76,863.02 $168,170.28
Year 4 $64,700.36 $236,891.72 $45,783.64 $13,179.90 $29,956.50 $3,698.70 $49,173.18 $118,524.66
Year 5 $38,713.94 $189,222.48 $24,429.28 0.27 $9,295.64 0.09 $22,554.06 $70,634.00
Year 6 $13,475.87 $142,876.00 $3,695.14 0.23 0.45 $24,257.03
Year 7 0.55 $97,723.63 0.18 0.54
Pay back period 6.55 yrs > 7yrs 6.18 yrs 4.27yrs 5.23 yrs 4.09 yrs 5.45 yrs 6.54 yrs
Ranking 7 8 5 2 3 1 4 6
Project Rank Capital Outlay Budget Available Remaining
Cambodia 1 $82,675.00 $1,000,000.00 $917,325.00
Philippines 2 $112,975.00 $917,325.00 $804,350.00
Pakistan 3 $164,125.00 $804,350.00 $640,225.00
Vietnam 4 $196,475.00 $640,225.00 $443,750.00
Thailand 5 $178,325.00 $443,750.00 $265,425.00
India 7 $265,425.00 $235,875.00 $29,550.00
• 7. Ranking the Projects - Discounted Pay-back Period 2/3
6 of the 7 (profitable) can be selected based on Discounted pay-back period ranking for the present year. Budget available is
insufficient for Australian Project hence Indian project has been selected.

32. • 7. Internal Rate of Return – In Brief

33. India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
Outflow $235,875.00 $519,400.00 $178,325.00 $112,975.00 $164,125.00 $82,675.00 $196,475.00 $420,975.00
Project Rank Capital Outlay Budget Available Remaining
Cambodia 1 $82,675.00 $1,000,000.00 $917,325.00
Philippines 2 $112,975.00 $917,325.00 $804,350.00
Pakistan 3 $164,125.00 $804,350.00 $640,225.00
Vietnam 4 $196,475.00 $640,225.00 $443,750.00
Thailand 5 $178,325.00 $443,750.00 $265,425.00
India 7 $265,425.00 $235,875.00 $29,550.00
• 7. Ranking the Projects – Internal Rate of Return 3/3
6 of the 7 (profitable) can be selected based on Internal Rate of Return ranking for the present year. Budget available is insufficient
for Australian Project hence Indian project has been selected.
India Indonesia Thailand Philippines Pakistan Cambodia Vietnam Australia
IRR 3.5122 (3.9035) 4.8449 11.3583 7.7663 14.6489 6.1940 3.5523
Ranking 7 8 5 2 3 1 4 6

34. I. Objectives and Aim
II. Key Questions
a) 2.1. Understand the needs of capital outlay?
b) 2.2. Capital outlay funding?
c) 2.3. Assumptions and factors to be considered?
d) 2.4. Stakeholder reporting?
e) 2.5. Key Performance Indicators?
III. Project Selection Criteria
IV. Projects Undertaken
V. Calculation of Discounted Cash Flows
VI. Ranking the Projects
a. NPV
b. Discounted Cash Flows
c. IRR
VII. Appendix: Country Wise Calculation
Contents:

35. India Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 total
Outflow -$235,875.00 -$235,875.00
Inflows $103,456.48 $33,271.48 $33,271.48 $33,271.48 $33,271.48 $33,271.48 $33,271.48 $303,085.34
Less Dep. $20,000.00 $15,000.00 $11,250.00 $8,437.50 $6,328.13 $4,746.09 $3,559.57 $69,321.29
Net $83,456.48 $18,271.48 $22,021.48 $24,833.98 $26,943.35 $28,525.38 $29,711.91 $233,764.05
Tax @ 17% $14,187.60 $3,106.15 $3,743.65 $4,221.78 $4,580.37 $4,849.32 $5,051.02 $39,739.89
Net after Tax $69,268.88 $15,165.33 $18,277.83 $20,612.20 $22,362.98 $23,676.07 $24,660.88 $194,024.17
Dep $20,000.00 $15,000.00 $11,250.00 $8,437.50 $6,328.13 $4,746.09 $3,559.57 $69,321.29
total $89,268.88 $30,165.33 $29,527.83 $29,049.70 $28,691.11 $28,422.16 $28,220.45 $263,345.45
p/v Factor 0.980 0.961 0.942 0.924 0.906 0.888 0.871
$87,518.51 $28,993.97 $27,824.73 $26,837.43 $25,986.42 $25,238.07 $24,567.60 $246,966.73
NPV $11,091.73
Outflow -$235,875.00
Discounting rate 0.962 0.925 0.889 0.855 0.822 0.790 0.760
Discounted PV $85,835.46 $27,889.54 $26,250.13 $24,831.81 $23,582.00 $22,462.45 $21,445.23 $232,296.61
NPV -$3,578.39
IRR 3.5122
Appendix: Country Wise Calculation 1/8

36. Indonesia Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 total
Outflow -$519,400.00 -$519,400.00
Inflows $152,588.03 $61,304.28 $61,304.28 $61,304.28 $61,304.28 $61,304.28 $61,304.28 $520,413.68
Less Dep. $32,500.00 $24,375.00 $18,281.25 $13,710.94 $10,283.20 $7,712.40 $5,784.30 $112,647.09
Net $120,088.03 $36,929.28 $43,023.03 $47,593.34 $51,021.07 $53,591.87 $55,519.97 $407,766.59
Tax @ 17% $20,414.96 $6,277.98 $7,313.91 $8,090.87 $8,673.58 $9,110.62 $9,438.40 $69,320.32
Net after Tax $99,673.06 $30,651.30 $35,709.11 $39,502.47 $42,347.49 $44,481.26 $46,081.58 $338,446.27
Dep $32,500.00 $24,375.00 $18,281.25 $13,710.94 $10,283.20 $7,712.40 $5,784.30 $112,647.09
total $132,173.06 $55,026.30 $53,990.36 $53,213.41 $52,630.69 $52,193.66 $51,865.88 $451,093.36
p/v Factor 0.980 0.961 0.942 0.924 0.906 0.888 0.871
$129,581.43 $52,889.56 $50,876.32 $49,160.96 $47,669.24 $46,346.47 $45,152.37 $421,676.37
NPV -$97,723.63
Outflow -$519,400.00
Discounting rate 1.041 1.083 1.127 1.172 1.220 1.270 1.321
Discounted PV $137,537.00 $59,583.16 $60,833.96 $62,391.80 $64,212.88 $66,263.96 $68,520.11 $519,342.88
NPV -$57.12
IRR -3.9035
Appendix: Country Wise Calculation 2/8

37. Thailand Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 total
Outflow -$178,325.00 -$178,325.00
Inflows $74,876.09 $27,312.34 $27,312.34 $27,312.34 $27,312.34 $27,312.34 $27,312.34 $238,750.13
Less Dep. $16,875.00 $12,656.25 $9,492.19 $7,119.14 $5,339.36 $4,004.52 $3,003.39 $58,489.84
Net $58,001.09 $14,656.09 $17,820.15 $20,193.20 $21,972.99 $23,307.82 $24,308.95 $180,260.30
Tax @ 17% $9,860.19 $2,491.54 $3,029.43 $3,432.84 $3,735.41 $3,962.33 $4,132.52 $30,644.25
Net after Tax $48,140.91 $12,164.56 $14,790.73 $16,760.36 $18,237.58 $19,345.49 $20,176.43 $149,616.05
Dep $16,875.00 $12,656.25 $9,492.19 $7,119.14 $5,339.36 $4,004.52 $3,003.39 $58,489.84
total $65,015.91 $24,820.81 $24,282.91 $23,879.50 $23,576.93 $23,350.01 $23,179.82 $208,105.88
p/v Factor 0.980 0.961 0.942 0.924 0.906 0.888 0.871
$63,741.08 $23,856.98 $22,882.33 $22,060.96 $21,354.35 $20,734.14 $20,179.43 $194,809.29
NPV $16,484.29
Outflow -$178,325.00
Discounting rate 0.952 0.907 0.864 0.823 0.784 0.746 0.711
Discounted PV $61,919.91 $22,513.20 $20,976.49 $19,645.72 $18,473.14 $17,424.14 $16,473.46 $177,426.07
NPV -$898.93
IRR 4.8449
Appendix: Country Wise Calculation 3/8

38. Philippines Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 total
Outflow -$112,975.00 -$112,975.00
Inflows $52,456.09 $21,132.34 $21,132.34 $21,132.34 $21,132.34 $21,132.34 $21,132.34 $179,250.13
Less Dep. $16,875.00 $12,656.25 $9,492.19 $7,119.14 $5,339.36 $4,004.52 $3,003.39 $58,489.84
Net $35,581.09 $8,476.09 $11,640.15 $14,013.20 $15,792.99 $17,127.82 $18,128.95 $120,760.30
Tax @ 17% $6,048.79 $1,440.94 $1,978.83 $2,382.24 $2,684.81 $2,911.73 $3,081.92 $20,529.25
Net after Tax $29,532.31 $7,035.16 $9,661.33 $11,630.96 $13,108.18 $14,216.09 $15,047.03 $100,231.05
Dep $16,875.00 $12,656.25 $9,492.19 $7,119.14 $5,339.36 $4,004.52 $3,003.39 $58,489.84
total $46,407.31 $19,691.41 $19,153.51 $18,750.10 $18,447.53 $18,220.61 $18,050.42 $158,720.88
p/v Factor 0.980 0.961 0.942 0.924 0.906 0.888 0.871
$45,497.36 $18,926.76 $18,048.78 $17,322.19 $16,708.50 $16,179.38 $15,713.98 $148,396.95
NPV $35,421.95
Outflow -$112,975.00
Discounting rate 0.893 0.797 0.712 0.636 0.567 0.507 0.452
Discounted PV $41,435.09 $15,697.87 $13,633.09 $11,916.03 $10,467.63 $9,231.13 $8,165.09 $110,545.93
NPV -$2,429.07
IRR 11.3583
Appendix: Country Wise Calculation 4/8

39. Pakistan Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 total
Outflow -$164,125.00 -$164,125.00
Inflows $79,536.09 $26,389.84 $26,389.84 $26,389.84 $26,389.84 $26,389.84 $26,389.84 $237,875.13
Less Dep. $16,875.00 $12,656.25 $9,492.19 $7,119.14 $5,339.36 $4,004.52 $3,003.39 $58,489.84
Net $62,661.09 $13,733.59 $16,897.65 $19,270.70 $21,050.49 $22,385.32 $23,386.45 $179,385.30
Tax @ 17% $10,652.39 $2,334.71 $2,872.60 $3,276.02 $3,578.58 $3,805.51 $3,975.70 $30,495.50
Net after Tax $52,008.71 $11,398.88 $14,025.05 $15,994.68 $17,471.90 $18,579.82 $19,410.76 $148,889.80
Dep $16,875.00 $12,656.25 $9,492.19 $7,119.14 $5,339.36 $4,004.52 $3,003.39 $58,489.84
total $68,883.71 $24,055.13 $23,517.24 $23,113.82 $22,811.26 $22,584.34 $22,414.14 $207,379.63
p/v Factor 0.980 0.961 0.942 0.924 0.906 0.888 0.871
$67,533.04 $23,121.04 $22,160.82 $21,353.60 $20,660.86 $20,054.24 $19,512.86 $194,396.47
NPV $30,271.47
Outflow -$164,125.00
Discounting rate 0.926 0.857 0.794 0.735 0.681 0.630 0.583
Discounted PV $63,781.21 $20,623.40 $18,668.74 $16,989.35 $15,524.96 $14,231.96 $13,078.44 $162,898.06
NPV -$1,226.94
IRR 7.7663
Appendix: Country Wise Calculation 5/8

40. Cambodia Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 total
Outflow -$82,675.00 -$82,675.00
Inflows $38,565.70 $17,670.70 $17,670.70 $17,670.70 $17,670.70 $17,670.70 $17,670.70 $144,589.92
Less Dep. $13,750.00 $10,312.50 $7,734.38 $5,800.78 $4,350.59 $3,262.94 $2,447.20 $47,658.39
Net $24,815.70 $7,358.20 $9,936.33 $11,869.92 $13,320.12 $14,407.76 $15,223.50 $96,931.54
Tax @ 17% $4,218.67 $1,250.89 $1,689.18 $2,017.89 $2,264.42 $2,449.32 $2,587.99 $16,478.36
Net after Tax $20,597.03 $6,107.31 $8,247.15 $9,852.04 $11,055.70 $11,958.44 $12,635.50 $80,453.18
Dep $13,750.00 $10,312.50 $7,734.38 $5,800.78 $4,350.59 $3,262.94 $2,447.20 $47,658.39
total $34,347.03 $16,419.81 $15,981.53 $15,652.82 $15,406.28 $15,221.38 $15,082.71 $128,111.56
p/v Factor 0.980 0.961 0.942 0.924 0.906 0.888 0.871
$33,673.56 $15,782.21 $15,059.75 $14,460.78 $13,953.95 $13,516.15 $13,130.41 $119,576.81
NPV $36,901.81
Outflow -$82,675.00
Discounting rate 0.870 0.756 0.658 0.572 0.497 0.432 0.376
Discounted PV $29,866.99 $12,415.73 $10,508.11 $8,949.55 $7,659.65 $6,580.62 $5,670.15 $81,650.80
NPV -$1,024.20
IRR 14.6489
Appendix: Country Wise Calculation 6/8

41. Vietnam Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 total
Outflow -$196,475.00 -$196,475.00
Inflows $67,183.03 $33,303.03 $33,303.03 $33,303.03 $33,303.03 $33,303.03 $33,303.03 $267,001.18
Less Dep. $32,500.00 $24,375.00 $18,281.25 $13,710.94 $10,283.20 $7,712.40 $5,784.30 $112,647.09
Net $34,683.03 $8,928.03 $15,021.78 $19,592.09 $23,019.82 $25,590.62 $27,518.72 $154,354.09
Tax @ 17% $5,896.11 $1,517.76 $2,553.70 $3,330.66 $3,913.37 $4,350.41 $4,678.18 $26,240.20
Net after Tax $28,786.91 $7,410.26 $12,468.07 $16,261.43 $19,106.45 $21,240.22 $22,840.54 $128,113.89
Dep $32,500.00 $24,375.00 $18,281.25 $13,710.94 $10,283.20 $7,712.40 $5,784.30 $112,647.09
total $61,286.91 $31,785.26 $30,749.32 $29,972.37 $29,389.66 $28,952.62 $28,624.84 $240,760.99
p/v Factor 0.980 0.961 0.942 0.924 0.906 0.888 0.871
$60,085.21 $30,551.00 $28,975.78 $27,689.84 $26,619.12 $25,709.10 $24,919.65 $224,549.69
NPV $28,074.69
Outflow -$196,475.00
Discounting rate 0.935 0.873 0.816 0.763 0.713 0.666 0.623
Discounted PV $57,277.49 $27,762.48 $25,100.61 $22,865.78 $20,954.42 $19,292.35 $17,826.11 $191,079.24
NPV -$5,395.76
IRR 6.1940
Appendix: Country Wise Calculation 7/8

42. Australia Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 total
Outflow -$420,975.00 -$420,975.00
Inflows $170,609.96 $60,586.21 $60,586.21 $60,586.21 $60,586.21 $60,586.21 $60,586.21 $534,127.23
Less Dep. $48,125.00 $36,093.75 $27,070.31 $20,302.73 $15,227.05 $11,420.29 $8,565.22 $166,804.35
Net $122,484.96 $24,492.46 $33,515.90 $40,283.48 $45,359.16 $49,165.92 $52,021.00 $367,322.88
Tax @ 17% $20,822.44 $4,163.72 $5,697.70 $6,848.19 $7,711.06 $8,358.21 $8,843.57 $62,444.89
Net after Tax $101,662.52 $20,328.74 $27,818.20 $33,435.29 $37,648.10 $40,807.72 $43,177.43 $304,877.99
Dep $48,125.00 $36,093.75 $27,070.31 $20,302.73 $15,227.05 $11,420.29 $8,565.22 $166,804.35
total $149,787.52 $56,422.49 $54,888.51 $53,738.02 $52,875.15 $52,228.00 $51,742.64 $471,682.34
p/v Factor 0.980 0.961 0.942 0.924 0.906 0.888 0.871
$146,850.51 $54,231.54 $51,722.67 $49,645.62 $47,890.66 $46,376.97 $45,045.08 $441,763.05
NPV $20,788.05
Outflow -$420,975.00
Discounting rate 0.962 0.925 0.889 0.855 0.822 0.790 0.760
Discounted PV$144,026.46 $52,165.77 $48,795.68 $45,935.49 $43,459.52 $41,276.55 $39,320.16 $414,979.63
NPV -$5,995.37
IRR 3.5523
Appendix: Country Wise Calculation 8/8

43. THANK YOU