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REJI VARGHESE
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REJI VARGHESE's Discussions
Circular Reference
1 Reply
Started this discussion. Last reply by preetam chandra Feb 24.
Loan Pricing
2 Replies
Started this discussion. Last reply by Sachidanand (Sacha) Singh Feb 23.
Financial Model with Sensitivity Analysis
Replied Jul. 28, 2009
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Latest Activity
In the excel sheet go to tools, options,calculations.Click iteration.
There are options for iterations, automatic or manual. Automatic calculates instantly whenever a change is made, in the manual mode you have to press F9 for calculation. (put in m…
Dear Friends,
In the Financial Models, I used to have problems with Circular References. Like in the calculation of interest during construction, the amount is based on teh total loan amount which is again absed on the total project cost. so it is…
Up front fee, Syndication fee and Participation fee are payable, usually, before disbursement - within 15/30 days of sanction. Commitment fee is payable, usually, quarterly in arrears on the amount of loan not drawn. To compare the three loans make…
You should work out actual cash flow (Inflow in year Zero and outflow in 0 to 7 years) for 6/5/7 years and apply discount % to each year cash flow. With trial and error, you will get there without much difficulty.
There is straight formula also but…
Friends,
Under project finance, we used to get term sheets from different banks in the syndication process with the following data:
Rate: LIBOR + 2.25%, LIBOR + 1.75%, LIBOR +2%
Tenure: 6/5/7 Years
Morotorium:1 year in all cases
Committment Fee:…
Before debating more deeply. I want to ask what are you trying to value ? A project valuation, or Equity Valuation ?.
I assume that you are trying to value a project with detailed 20 yrs cash flow. If you are trying to value a project (a corporatio…
Indeed correct - having met the required rate of return (and taken account of initial investment) there remains excess cash
Hai Reji,
The final US$ 20M is the excess return for the investor.
The NPV result means that all the cash flow from the project (20 years cash flow) for the investor/sponsor is adequate enough to give investor/sponsor 12% P.A return, and more over…
NPV of $20 Mn is the Profit you attained after accepting the Proposed Project........
As NPV =Present Value of Future Cash Inflows - Initial Investments.
your future cash flows are discounted at 12% (opportunity cost)...
Positive NPV Signifies a…
Hi Reji
you must distinguish between a "project" and a "company" when you are doing a valuation exercise ! a project, by definition, is for a fixed life...say 20 years or 25 years etc...so the cash flows will be for that fixed period...but a company…
Dear Aswin,
Can u give me a tutorial on how u put the Macros in the above model?
Thank u in advance
Reji
Dear Ignacio,
Eventhough i understands your explanation, need a little help on this. We normally calculates NPV of the project based on CFF aor CFE based o IRRp or IRRe. but how we calculate the NPVe?
Thanks
reji
I have some qualfication on considering 12% as a opportunity cost, as discount rate is the Cost the Company needs to pay to raise capital resources, which might either be equity of debt of mix of both, so it may not always be possible and necessary…
Yes indeed Mike.... that's why 20 is better than 19 !!! and great to point it out.
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- Education:
- MBA
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