valuation modeling 1.1

7/24/2019 Valuation Modeling 1.1

http://slidepdf.com/reader/full/valuation-modeling-11 1/13

Time Value of mon

1 Capital recovery or Instalment

Loan amount 100000Interest 0.09

Term 5

Instalment =PMT(Interest,Term,-PV !5,"09.!5

2 Amortisation schedule

Inst.no Principal Interest

0 100000 0.09

1 1#,"09.!5 9,000.00! 1$,!1%.0$ ",&9#.1"

% 19,$5!.!5 5,$5#.99

& !1,#%$.9# &,0"0.!9

5 !%,5$#.&# !,1!!."$

%a 'n initial loan of s. 100000 is )i*en to a customer +it te eplicit option for

te customer to repay principal anytime any amount. e*elop a mo/el to incorporate

tis payment a/ustin) te remainin) MI +itout can)in) te time perio/

Loan amount 100000

Tenue 5

Interest 0.1&

MI 2!9,1!$.%5

%3 In te same pro3lem, if te emi is to 3e retaine/ an/ te perio/ is to 3e a/uste/,

o+ +ill you can)e te mo/el4

Loan amount 100000

Tenure 5

Interest 0.1&

MI 2!9,1!$.%5

& Internal rate of return

Time cas flo+s

0 -1&00001 &0000

! &0000

% &0000

& &0000

5 #0000

=irr(cas flo+ ran)e



5 Structuring of loan repayments

ost of te asset 100000

e6uire/ I 0.!

Term 5 years

Pattern of payments

1 0 0

1 0 1

1 1 0

1 1 1

1 1 0

Term P* of s.1 Pattern

0

1

!

%&

5

Total of PV of pattern

'mount to 3e reco*ere/

# Accelerated recovery

' company +ants a loan of 1000000, to 3e reco*ere/ in 5 instalments +it e*er

increasin) at a rate of $7. If te len/er8s I is 1! 7, so+ te reco*ery sce/

'mount of loan 1000000

ate of acceleration 0.0$Len/er8s I 0.1!

" ' company +ants to structure its repayment of te loan to its core ris, +ic is

3y te commo/ity price in/e. It +ants a loan !0 million to 3e repai/ in si instal

amount of instalment +ill *ary /epen/in) on te mo*ements in te commo/ity p

Te instalment +ill )o up or /o+n /epen/in) on te rate of /ecrease or increas

onstruct a mo/el to implement tis sceme

'mount of loan !000000

e6uire/ irr 0.15

term #

$ Net Present Value/I

year

0

1

!

%

&

5



ost of apital

:et Present Value =np*(cost of capital,cas flo+ ran)e;initial in*estment

Internal ate of eturn =I(casflo+ ran)e

9 <ear asoutflo+s Inflo+s

0 -100000

1 -!5000 #0000

! -15000 &0000

% %0000

& %5000

5 %5000

# %0000

" !0000

ost of capital 0.15

:et present *alue(:PV

Internal rate of return(I10 ' ire purcase financier approaces you +it te follo+in) terms for financin) an ass

+ort s.100,000

>imple Interest o*er s.100,000

?or 1 year, 107

?or ! years, !07

?or % years, %07@e reco*ers te total amount (principal ; interest in e6ual montly instalments. Aat is

te effecti*e interest car)e/ 3y te financier in te % cases4

11 Te follo+in) /etails are )i*en +it reference to a proect

Proect as ?lo+s

<ear Butflo+s Inflo+s

0 (!00,000.00

1 (!5,000.00 #0,000.00

! (10,000.00 5#,000.00

% #5,000.00& "0,000.00

5 &0,000.00

# &0,000.00

" %0,000.00

$ %0,000.00

9 !0,000.00



10 !1,000.00

B

:PV

I

etermine te follo+in) '. Te :PV at te follo+in) costs of capital

(i 1!7

(ii 1%7

(iii 1&.57

(i* 157

C. Te I assumin) te follo+in) initial in*estments

(i 1$0,000

(ii !!0,000

(iii !&0,000

(i* !#0,000:PV

iscount

1!.007

1%.007

1&.507

15.007

I :PV

In*estments

-1$0000

-!!0000

-!&0000-!#0000

1!.007 1%.007

-1$0000

-!!0000

-!&0000

-!#0000

1! MI(mo/ifie/ internal rate of return

ec te rein*estment assumption of I

0 -100000

1 &5000

! &9000% !0000

& %0000

5 !5000

I

MI

1% DI(Ene*en perio/ cas flo+s



DI an/ D:PV

1-May-00 -100000

1-:o*-00 !5000

1-'pr-01 %0000

1-Bct-01 %5000

1-'pr-0! !&000

1-Bct-0! !0000

I

B 0.1

:PV



y-applications

MI 2!,0"5.$&

Instalment !alance

100000

!5,"09.!5 $%,!90."5!5,"09.!5 #5,0"".#$

!5,"09.!5 &5,!!5.&!

!5,"09.!5 !%,5$#.&#

!5,"09.!5 0.00

1#7



0 1

0 1

0 1

1 0

1 0

P* of pattern rosscec

instalment

le

easure/

ents 3ut te

ice in/e.

in te price in/e

asflo+ pattern

-100000

%0000

%5000

&0000

!5000

!5000



0.1%

:etflo+s

-100000

%5000

!5000

%0000

%5000

%5000

%0000

!0000

t

0.1$

:etflo+s

(!00,000.00

%5,000.00

&#,000.00

#5,000.00"0,000.00

&0,000.00

&0,000.00

%0,000.00

%0,000.00

!0,000.00



!1,000.00

0.10

1&.507 15.007



Scenario Analysis

Te follo+in) /etails are )i*en +it reference to a proect

Proect as ?lo+s

<ear Butflo+s Inflo+s :etflo+s

0 (19",1$!.00 (19",1$!.00

1 (!0,000.00 &5,!"&.00 !5,!"&.00

! (10,000.00 5",%!!.00 &",%!!.00

% #5,000.00 #5,000.00

& "0,000.00 "0,000.00

5 &0,000.00 &0,000.00

# &0,000.00 &0,000.00

" %0,000.00 %0,000.00

$ %0,000.00 %0,000.00

9 !0,000.00 !0,000.00

10 !1,000.00 !1,000.00

B 0.10

:PV

Ionsi/er te follo+in) tree scenarios

>cenario-1 >cenario-! >cenario-%

In*estment -1$0000 -!05000 -!!0000

ost of capital 0.09 0.11 0.1&

?irst <ear as in flo+ #0000 5!000 &5000

>econ/ <ear as in flo+ #0000 5"000 5!000

Pro3a3ility 0.! 0.& 0.#



3est case

Pa)e 1!

-1$0000

#0000

#0000

0.09



+orst case

Pa)e 1%

-!!0000

&5000

5!000

0.1&

valuation modeling 1.1

Documents