100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
FINC2012 Individual Assignment Semester 2 2024 - DUE 13 September 2024 £2.16   Add to cart
Quickly navigate to
Preview
  2.  
  3. University Of South Africa
  4.  
  5. Corporate Finance II (FINC2012)

Exam (elaborations)

FINC2012 Individual Assignment Semester 2 2024 - DUE 13 September 2024

1 review
 55 views  3 purchases
  • Module
  • Corporate Finance II (FINC2012)
  • Institution
  • University Of South Africa
  • Book
  • Corporate Finance

FINC2012 Individual Assignment Semester 2 2024 - DUE 13 September 2024 ;100 % TRUSTED workings, Expert Solved, Explanations and Solutions. For assistance call or W.h.a.t.s.a.p.p us on ...(.+.2.5.4.7.7.9.5.4.0.1.3.2)........... FINC2012 Semester 2 2024 Individual Assignment Due 13th September 2024...

[Show more]

Preview 2 out of 10  pages

Document information

  • September 8, 2024
  • 10
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • finc2012 individual assignment semester 2 2024

Connected book

book image

Book Title:

Author(s):

  • Edition:
  • ISBN:
  • Edition:

More summaries for

  • CORPORATE FINANCE EXAM QUESTIONS AND ANSWERS #20
  • ESSENTIALS OF CORPORATE FINANCE FULLY EXPLAINED #19
  • CORPORATE FINANCE EXAM WITH CORRECT ANSWERS #18
All for this textbook (13)

Written for

  • University of South Africa
  • Corporate Finance II (FINC2012)
All documents for this subject (1)

1  review

review-writer-avatar

By: youngalexy864 • 1 month ago

Seller

avatar-seller
LIBRARYpro

Reviews received

Content preview

FINC2012
ASSIGNMENT SEMESTER 2 2024
UNIQUE NUMBER:
DUE DATE: 13 SEPTEMBER 2024

, FINC2012

Individual Assignment Semester 2 2024

Unique Number:

Due Date: 13 September 2024

Corporate Finance II

Task 1: NPV and IRR Calculation

1. Initial capital expenditure: $20 million.
2. Depreciation: Straight-line over ten years ($2 million annually).
3. Net Working Capital: $1.25 million invested at inception, recovered in year 10.
4. Production:
o Year 1: 1,000 barrels/day.
o Declines by 15% annually thereafter.
5. Oil price: $80/barrel (constant).
6. Producer payment: 60% of wellhead price ($48/barrel).
7. Operational costs: $8.50/barrel (constant).
8. Tax rate: 35%.
9. Cost of capital: 12%.

Using the above, calculate the annual cash flows over the project’s life by accounting for
production decline, revenue, costs (producer fees + operational costs), depreciation,
and taxes. With these cash flows, calculate the NPV and IRR using financial formulas or
an Excel model.

 Recommendation: Based on the NPV (positive/negative) and IRR (greater or
less than 12%), you will determine if the project is financially viable.
 Reservations: Discuss uncertainties such as the assumption of constant oil
prices, production decline rates, and any regulatory risks that might affect
profitability.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller LIBRARYpro. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £2.16. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

78998 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now

Start selling
£2.16  3x  sold
  • (1)
  Add to cart