Escolar Documentos
Profissional Documentos
Cultura Documentos
JuanFresnoandhisfamilyarethinkingaboutconstructinganewwinerywithintheirproperty
inValdepeas,Spain.Uptonow,theyhavebeensellingtheirgrapeproduction,32.500kgper
year,toacooperativefactoryaftereveryharvest,atapriceofaround1,5/kg.
BeforetakinganydecisionJuansfatheraskshimtoperformaneconomicassessmentofthe
wineryproject.
AccordingtothesizeandoutputofFresnosvineyard,Juanconsidersthattheywillbeableto
producearound40.000bottlesof0,75literseach.Withthisestimation,theinvestmentbudget
forthisprojectis:
CONCEPT
Newcompanysetup
Pieceofland
Industrialpremises
Facilities
Machinery
Engineeringproject
Licenses
Marketing
Workingcapital
TotalInvestment
COST
3.000
0
500.000
50.000
250.000
40.000
12.000
6.000
30.000
891.000
Table1.Investmentcosts
Inordertostudyhowprofitableishisproject,Juanhastogenerateanexcelsheetwithallcash
flowslinkedtothebusiness.
Annualincomeswillcomefromtwoinputs:salesofwineandsalesofwasteproducts.Itisalso
necessarytotakeintoaccountthat,usingtheirowngrapesforproducingwine,Juansfamily
will not receive the money coming from grape production sales. The next table shows these
concepts:
CONCEPT
Winebottlessale
Wasteproductssale
Formergrapeproductionsale
QUANTITY UNIT
40.000 bottles
4 Tons
32.500 kg
UNITPRICE
11
1,000
1,5
TotalRevenues
TOTAL
440.000
4.000
48.750
395.250
Table2.Annualrevenues
Annualexpensesaremainlystaff,6persons,andthecostoftherestofthegrapesnecessaryto
reachtheproductionobjective,around17.500kg.Havingconstructedanewwinery,itwont
benecessarytokeeponhiringthewarehousethefamilyisusingnow.Table3depictsthese
expensesandsomeminorones.
CONCEPT
QUANTITY
UNIT
6 workers
17.500 kg
Staff
Grapes
Additives
UNITPRICE
TOTAL
145.000
1,5 26,250
6,000
Energy
Maintenance
Administration
Bottlesandlabels
Formerwarehousecost
4,500
2,300
3,000
10,000
6,000
Totalexpenses 191.050
Table3.Annualexpenses
Itisconsideredthatthedepreciation(amortization)ofmainprojectshardwareisdividedinto
10years,seetable4.
CONCEPT
Industrialpremises
Facilities
Machinery
Site
YEARS
10
10
10
10
ANNUALQUANTITY
50.000
5.000
25.000
0
Total
80.000
Table4.Hardwaredepreciation
And, finally, with an expected winerys lifetime of 20 years, table 5 shows the financing
parametersthatJuanwilltakeintoaccounttocalculatetheprojectsprofitability.
CONCEPT
StockholdersEquity
Financing
InterestRate
Loanpaybackperiods(years)
DiscountRate
%
50%
50%
10%
QUANTITY
445.500
445.500
10
10%
Table5.Financingparameters
Itisalsoexpectedthatpricesforbothsalesandpurchaseswillrisearound3%annually.
CONCEPT
Salespriceannualvariation
Purchasespriceannualvariation
%
3%
3%
Table6.Pricesvariation
Usingallthatdatainprevioustables,Juanhastocreateacashflowtable,duringthe20year
lifetime and calculate: Net Present Value (NPV), Internal Rate of Return (IRR) and Payback
period(PB).
UseMSExcel2010
CONCEPT
Investment
Revenues
Expenses
(Amortizations)
0
####
####
####
####
PBIT
####
FinancialExpenses
####
PBT
####
Taxes
####
PAT
####
Amortizations
####
ANNUALRESULT #### ####
DISCOUNTEDRESULT #### ####
ACCUMULATEDRESULT #### ####
0
1
####
####
####
####
####
####
####
####
####
####
####
####
2
####
####
####
####
####
####
####
####
####
####
####
####
3
####
####
####
####
####
####
####
####
####
####
####
####
4
####
####
####
####
####
####
####
####
####
####
####
####
5
####
####
####
####
####
####
####
####
####
####
####
####
6
####
####
####
####
####
####
####
####
####
####
####
####
7
####
####
####
####
####
####
####
####
####
####
####
####
8
####
####
####
####
####
####
####
####
####
####
####
####
9
YEAR
10 11
####
####
####
####
####
####
####
####
####
####
####
####
10
####
####
0
####
0
####
####
####
0
####
####
####
11
12
13
14
15
16
17
18
19
20
####
####
0
####
0
####
####
####
0
####
####
####
12
####
####
0
####
0
####
####
####
0
####
####
####
13
####
####
0
####
0
####
####
####
0
####
####
####
14
####
####
0
####
0
####
####
####
0
####
####
####
15
####
####
0
####
0
####
####
####
0
####
####
####
16
####
####
0
####
0
####
####
####
0
####
####
####
17
####
####
0
####
0
####
####
####
0
####
####
####
18
####
####
0
####
0
####
####
####
0
####
####
####
19
####
####
0
####
0
####
####
####
0
####
####
####
20
Table7.Cashflowexceltableexample
SensitivityAnalysis
Once the investment parameters have been calculated, Juans father wants to know how
sensitive their project is when the main inputs change. He is mainly concerned about
StockholdersEquitypercentage,discountfactorandbottlesalepricevariations.
For that purpose, Juan creates a table varying those inputs from 50% to +100%, in other
words, studying a range from one half to double values, in steps of 10%. There will be 16
valuesintotal.
With these data series Juan will have to construct three graphics, with three lines each,
showinghisfatherhowsensitivetheinvestmentprojectistothesefactors.
UseMSExcel2010
1
PARAMETERS
SOTCKHOLDERSEQUITY
DISCOUNTRATE
BOTTLESALEPRICE
50% 40%
30% 20%
25%
5%
5,5
35%
7%
7,7
30%
6%
6,6
40%
8%
8,8
6
BASE
CASE
45% 50%
9% 10%
9,9 11,0
5
10
11
12
13
14
15
16
10%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
11% 12% 13% 14% 15% 16% 17% 18% 19% 20%
12,1 13,2 14,3 15,4 16,5 17,6 18,7 19,8 20,9 22,0
Table8.Parameterschangestableexample
Question:Whatwouldhappenif,becauseofproductiontiming,theFresnofamilyhastowait
for3yearsafterthewineryisconstructedtoselltheirproofwine(vinodereserva)production?
WhatchangesshouldJuanmakeishisexceltables?