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Homework answers / question archive / INVESTMENT PROJECT EVALUATION SAMPLE TEST Task 1 The company plans to implement a project to run an escape room in the city
INVESTMENT PROJECT EVALUATION
SAMPLE TEST
The company plans to implement a project to run an escape room in the city.
The cost of the investment is estimated at PLN 80,000.
The variable cost of hosting one visit in the escape room is estimated at PLN 25
The ticket price for one visit is PLN 100
Fixed costs are estimated at PLN 20,000 in total.
a) calculate the BEP
ANSWER:
b) how many visits per month (on average) should be sold to reach a profit of PLN 30 000 after 1 year?
ANSWER:
c) in the middle of project implementation, costs forecasts indicate that the investment budget may be exceeded by 30%. How will this affect the results of the analysis?
ANSWER:
Task 2
The company named SNOWWHITE plans to design and manufacture a machine worth 1,000,000 euro for the production of garden statues (dwarfs). The machine's service life is 5 years (for the needs of depreciation costs). It is predicted that sales in the 1st year will amount to 10K units and will grow by 2,000 units per year in the next years. The selling price will be EUR 30 / item, and the production costs will be EUR 18 / item.
Based on the data, determine:
a) profit from project implementation in individual years.
b) cash flows in each individual year
c) the payback period
d) NPV on the project assuming a discount rate of 10%
e) payback period on invested capital (“investment payback period”) – this one is calculated using the discounted cash flows.
