资本预算案:巴西利亚迪斯尼主题公园
Paulus Bon博士
在新闻里…
仔细阅读这个箱子
如果有什么不清楚的地方，可以提问：
麦肯锡的可行性研究是一项沉没成本，与其说是5亿美元，不如说是5亿美元
沉没成本将折旧10年，无残值…
注：共有2项投资（30亿美元和15亿美元）和3个创收机构……（魔幻王国、爱普科特和度假村）
这两项投资用macrs折旧…
对于第1-10年的收入，在第10年之后提供固定的永久增长率…
如果需要对总收入进行分析，假设利润率在-15%到+15%之间，但是+15%更适合市场
Capital Budgeting CASE
Walt Disney Theme Park Brasilia
Week 2-2018 FINC 5880
Dr. Paulus Bon
In the news…
Read the Case carefully
Ask questions if anything is unclear:
The feasibility study by McKinsey is a sunk cost it is rather $500 M USD than $500K USD
The sunk cost will be depreciated 10 years SL with no salvage value…
Note there are 2 investments ( $3 B USD and $1.5 B USD)and 3 Revenue generators…(Magic Kingdom, Epcot and the Resorts)
The 2 investments are depreciated with MACRS…
For the Revenues of year 1-10 specific growth rates are provided after year 10 a flat perpetual growth rate…
What if analysis needs to be performed on total revenues assuming a margin of -15% to +15% however the +15% is more for MKT purposes
Expenses…WC and…
Due to considerable uncertainty the expenses need to be considered in a what if as well…
The MACRS % depreciation and the maintenance CAPEX are provided for each year t=0 to t=10
The non cash WC is calculated depending on Revenues (5%) in the base case
WC is uncertain and significant and thus a what if analysis is also provided for this part of the future cash flows
Detailed assumptions for the calculation of the WACC% that you will need to use for discount factor is given
How to Start?
You will do this in EXCEL (spreadsheet)
You will provide NOPAT (Revenues – Expenses) excluding Sunk Costs
You will provide capital invested (including Sunk Costs)…to make sure that your depreciation $ is correct
You will provide calculation of the non cash WC and the CHANGE in WC yearly…
You will provide maintenance Capex y.o.y and thus free cash flow in t=0 to t=10
You will discount future cash flows at the WACC%
After year t=10 you will calculate a Terminal Value using a perpetual growth rate of 2%
You will provide 3 what if scenarios
Revenues +/- 15%
Expenses % of revenues
Non cash WC % of revenues
The scenarios are calculated one by one THUS if Revenues are assumed -15% the Expenses and non cash WC stay unchanged (as calculated in the base case)
This rule will also be followed if the % Expenses or non cash WC is changed (the other 2 stay the same as in the base case)
After this you can start to combine to see what happens to NPV and IRR% if BOTH revenues and expenses are different from the base case, BOTH expenses and WC % are different or both Revenues and % WC are different
The worst case would of course be if all 3 are unfavorable in comparison to the base case but you will need to consider that the chance for this to happen may be small?
It all starts with a clear forecast of future sales revenues…and direct expenses based on provided %
Next is Depreciation…
The Sunk costs are depreciated over 10 years straight line… ($ 50 M each year)
The investments follow MACRS (the table is provided in the case take this % of the starting value of the investments and get:
Here is help if you could not get the depreciation amount…
SG&A as % of revenues…and you can calculate NOPAT…
FCF=NOPAT + DEP+/- change in WC –maintenance capex…
You have got NOPAT and Depreciation already
The non cash WC is a % of sales and the annual change can be calculated easily
Maintenance capex is a % of the depreciation and so this is easy to generate…
Note that SG&A is partly fixed
If you are still unclear about the WACC%...
Now the WORST CASE scenarios:
Lower the Revenues with 15% … what is the NPV and IRR% after that? (CP=consider all other to be unchanged) call this scenario 1
Now higher the direct expenses as given in the case…what is the NPV and IRR% after that? (CP) scenario 2
Now change the non cash WC % as indicated in the case…what is the NPV and IRR% % after that? (CP) scenario 3
After this combine lower revenues and higher expenses…what is the NPV and IRR% after you change both ?(CP) combi-scenario 1
After this combine higher WC and higher expenses ….what is the NPV and IRR% after you change these? (CP) combi-scenario 2
Then lower revenues and higher WC …. combi-scenario 3
Then lower revenues, higher expenses and higher WC… final scenario
After you calculated NPV $ and IRR% for all these scenarios…provide an overview
Estimated Likelihoods: Risk Paragraph 10K -2017
Check the Risk Management Paragraph in the last 10K of Walt Disney 2017
The company mentions several risks that they can “control” and “not control”
Consider the uncontrollable risks and their likelihood to come up with a likelihood in the scenario table…
Add the statements to your final report and comment on them so that the BoD can understand your assumed likelihoods…
The final part…edit your report!
Review your data and results
Form an opinion about what to recommend to the BoD…
Based on your estimated likelihood of each scenario come to a final conclusion
Think about “exit-strategies” if this project goes SOUTH…
What is your contingency-plan?
How will you manage risks that can be managed?
结果的详细信息显示在excel工作表中。
The detail of the result is present in the Excel Sheet.
基本情况，最坏情况1，2，3；最坏情况组合1，2和3。每个场景都有其可能性，也就是说发生的可能性。
在每种情况下计算结果的细节将在excel表中提及。
2。对向董事会推荐什么形成意见
项目的净现值为负，基本情况和各种最坏情况的内部收益率均为负。
The Base Case, Worst Cases 1, 2, 3; Worst Cases Combination 1, 2 and 3. Each of the Scenario has its likelihood, meaning the probability of occurrence.
The details of the result calculated in each case would be referred to in the Excel sheet.
2. Form an opinion about what to recommend to the BoD对向董事会推荐什么形成意见
项目的净现值为负，基本情况和各种最坏情况的内部收益率均为负。
The NPV of the project is negative, and the IRR% is negative for the Base Case and also for the various Worst Cases.
3. Based on your estimated likelihood of each scenario come to a final conclusion根据你对每个场景的估计，得出最终结论
最终结论见上表，净现值为-21.73亿美元，内部收益率为-8.78%。
Please refer to the table above for the Final Conclusion, the NPV = -$2173 million and the IRR = -8.78% overall.
4. Think about “exit-strategies” if this project goes SOUTH
(1) To sell the Theme Park business segments of Disney to other companies. The disposals of such business with less profit making would increase the total revenue of the Group.
(2) To separate out the Theme Park business segments of Disney and make it IPO
(3) To replace the current CEO with a better candidate who would run more the company more efficiently and profitably. |