Midterm1

Question 1

EBITDA

Answer 1

+ revenue
- total operating cost
- order cost

EBITDA=Income-Cost
Cost=c_v + c_f

Earning Before interest, taxes, depreciation(avskrivning), amortization

Question 2

The income statement

Answer 2

EBITDA
- used for investment plan, long-term financing plan, a projected income statement

Question 3

NPV

Answer 3

NPV = -INV + [FC1/(1+t) + FC2/(1+t)^2 … FCn/(1+t)^n

NPV > 0 - good investment
NPV < 0 - inadvisable investment

Question 4

Present value

Answer 4

PV = FV /(1+t)^n
t- update rate
n-number of years

Question 5

Future value

Answer 5

FV=PV*(1+t)^n
t- update rate
n-number of years

Question 6

The update rate

Answer 6

Should take into account inflation, investment risk & cost of opportunity

Question 7

WACC

Answer 7

WACC = FPK_e + (1-FP) K_d(1-T)

FP - precentage of equity
K_e - cost of equity
K_d - cost of dept
T - tax rate

Question 8

Income =

Answer 8

EP * PM

Ep = energy production
Pm = energy price