ydc limited - solution

8/10/2019 YDC Limited - Solution

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YDM Limited

Inputs

New drug to be introduced in the year 2014

Entry of first competitor 2017

Entry of second competitor 2022

Number of project years 10

Investment in newplant (400,000)

Per unit cash flow 10

Reduction in market share on 1st comp entry 30.00%

Reduction in market share on 2nd comp entry 15.00%

Growth rate of the market 10.00%

Initial demand 10,000

WACC 15.00%

Work area

Market demand Envisaged

Market taken away by first competitor

Market taken away by second competitorDemand fo YDC Ltd.

Cash inflows (400,000)

Net present values @15%

IRR

10,00011,000

12,100

13,400

14,800

16,300

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Market demand Envisaged


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2014

Market demand Envisaged 10,000

It is a very simple trick. Use OFFSET function to choose the graph that you

First prepare the drop down box. The drop down box creates a link numbe

Here we go!!

Choose the graph that you want -->

2,014

Market demand Envisaged 10,000

The above chart is a one-chart model. Se

2,000

,

2014 2015 2016 2017 2018 2019

10

5

10

15

20

25

2,014

Thousands


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Details of Data Validation to the right

This is a input variable

This is also a input variable. The IF functions in work area will take care of all acceptable

entries in these two cells. Try it out!!

Output

159,443

24.39%

1 2 3 4 5 6 7

2014 2015 2016 2017 2018 2019 2020

10,000 11,000 12,100 13,310 14,641 16,105 17,716

0 0 0 (3,993) (4,392) (4,832) (5,315)

0 0 0 0 0 0 010,000 11,000 12,100 9,317 10,249 11,274 12,401

100,000 110,000 121,000 93,170 102,490 112,740 124,010

159,443

24.39%

MANAGEMENT SUMMARY

Net Present Value at 15%

Internal Rate of Return


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2015 2016 2017 2018 2019

11,000 12,100 13,400 14,800 16,300

want.

r which is used to create the numbers required for the graph.

Link number here in yellow cell, used in OFFSET function

1

2,015 2,016 2,017 2,018 2,019 2,020 2,021

11,000 12,100 13,310 14,641 16,105 17,716 19,487

below for dynamic charts (all in one place)

1112

1315

1618

19

21

24

2,015 2,016 2,017 2,018 2,019 2,020 2,021 2,022 2,023

Demand fo YDC Ltd.


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C4 This validates the current year, whenever the

C5 This validates for year of entry of 1st competi

C6 This validates for year of entry of 2nd compet

C7 Restricts any number from 1 to 20 (this mode

C9 Restricts entry in negative values

C10 Restricts entry in positive values

C12 Restricts entry between '0' and '1'

C13 Restricts entry between '0' and '1'

C14 Restricts entry between '0' and '1' (arguable -

C15 Restricts entry in positive values

C16 Pegs max. WACC at 25% and minimum at 0%

8 9 10 11 12 13 14

2021 2022 2023 0 0 0 0

19,487 21,436 23,579 0 0 0 0

(5,846) (6,431) (7,074) 0 0 0 0

0 (3,215) (3,537) 0 0 0 013,641 11,790 12,969 0 0 0 0

136,410 117,900 129,690 0 0 0 0


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2,022 2,023

21,436 23,579


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model is used

or after the first year of production and also ensures that he cannot enter after t

tor after the entry of 1st competitor and also ensures that he cannot enter after t

will accept any number of years from 1 to 20)

one can say that growth rate can be more than 100% also - discretionary)

15 16 17 18 19 20

0 0 0 0 0 0

0 0 0 0 0 0

0 0 0 0 0 0

0 0 0 0 0 00 0 0 0 0 0

0 0 0 0 0 0


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e project period is over (in other words, second competitor cannot enter in 2014

e project period is over (in other words, second competitor cannot enter until 2


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and neither after 2024)

20 and neither after 2024) (this has an alert)


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Functions used in the Model

None in Inputs area

None in Output area

In work area

IF

ROUND

NPV

IRR

TEXT function in F13

Nothing else

Functionalities used

Borders

Formats

Simple Chart and Dynamic Charts - various chart functionalitiesConditional Formatting in I13 and I14 (display of results)

Data Validation of inputs

ydc limited - solution

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