This
is
the
updated
version
of
the
document.
Assumptions
on
the
revenues
and
expenditures
evolution
Project
period
The
business
plan
is
set
for
a
period
of
10
years.
This
length
is
the
investment
horizon.
Installed
Capacity
The
installed
capacity
is
provided
by
the
initial
investment
made
in
year
0
(present).
This
capacity
is
equal
to
20
MegaWatt
(MW).
All
of
this
capacity
is
installed
in
year
0.
But,
the
utilization
rate
of
the
installed
panels
will
reach
100%
in
the
third
year
only
as
shown
in
the
table
below.
in
%
Utilization
Rate
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
0
75%
100%
100%
100%
100%
100%
100%
100%
Year
10
100%
Production
(in
MwH)
The
production
depends
on
the
installed
capacity,
their
utilization
rate,
the
length
of
daily
production
in
hours
and
the
climate
of
the
country
where
the
project
is
installed.
The
average
of
production
per
day
is
about
5
hours.
The
production
is
measured
in
MegaWatt
Hours.
For
each
year,
the
production
is
equal
to
the
installed
capacity
in
use
times
the
number
of
solar
day
per
year
times
the
production
hours
per
day.
Year
1
Year
2
Year
3
to
10
Solar
day
per
year
0
365
365
Production
hours
Utilization
rate
per
day
0
0%
5
75%
5
100%
Production
[] [] []
Electricity
Price
Solaris
Omni
Co
commercializes
the
production
for
a
unit
price
of
370
Aces
per
MwH.
The
client,
Universe
City
Electricity,
buys
100%
of
the
Solaris
Omni
Co
production.
Investment
The
necessary
investment
will
be
paid
at
the
beginning
of
the
project.
Initial
Investment,
(noted
I0)
will
cost
2
000
000
ACEs
per
MegaWatt
installed.
Total
capacity
(20
MW)
is
installed
in
year
0.
From
the
second
year,
a
replacement
CAPEX
of
about
2
000
000
ACEs
per
year
will
be
necessary
in
order
to
replace
the
defective
material.
The
total
PP&E
of
the
company
will
be
linearly
depreciated
along
a
period
of
10
years.
Capital
structure
and
cost
of
capital
The
initial
investment
will
be
financed
up
to
50%
by
equity
and
the
remaining
50%
by
debt.
Weighted
average
cost
of
capital
(WACC)
is
equal
to
10%
Costs
Maintenance
and
other
variable
costs:
1.20
Aces
per
MwH
Fixed
costs
(overhead,
):
350
000
Aces
per
year
Corporate
taxes
20%
if
earning
is
between
0
and
500
000
Aces 25%
if
earning
is
between
500,001
and
1,500,000
Aces 30%
if
earning
is
over
1
500
000 THUS,
THE
TAX
RATE
IS
PROPORTIONAL
AND
NOT
PROGRESSIVE.
This
means,
for
example,
that: -
if
the
earnings
before
tax
(EBT)
are
1,000,000
you
have
to
apply
the
rate
of
25%
on
1,000,000.
Due
corporate
taxes
are
thus
25%
x
1,000,000
=
250,000,
and
net
result
is
1,000,000
-
250,000
=
750,000. -
if
earnings
before
tax
are
2,000,000
you
have
to
apply
the
rate
of
30%
on
2,000,000.
Due
corporate
taxes
are
thus
30%
x
2,000,000
=
600,000
and
net
result
is
2,000,000
-
600,000
=
1,400,000
In
case
of
a
loss,
the
firm
benefits
from
tax
savings.
The
tax
savings
rate
corresponds
to
the
marginal
tax
rate
applied
to
the
absolute
value
of
the
loss.
For
e.g.,
if
in
year
1,
the
firm
loses
2,100,000
aces,
the
tax
saving
is
630,000.
It
can
be
deduced
from
taxes
in
year
2.
If
taxes
in
year
two
are
less
than
630,000
the
remaining
amount
will
be
deduced
from
year
3
taxes.
In
the
previous
example,
if
taxes
in
year
2
amounts
to
Aces
500
000,
the
firm
will
pay
0
taxes,
and
have
the
remaining
130,000
to
deduce
from
its
taxes
in
year
3.
Debt
conditions
Annual
interest
rate:
5%
Methods
used
to
compute
loan
payments:
Reimbursement
period:
10
years
First
annuity
paid
at
the
end
of
year
1
Constant
annuity
paid
annually
Working
capital
The
operating
process
of
Solaris
Omni
Co.
needs
additional
funding
estimated
by
20
days
of
sales
(on
a
base
of
360
day
per
year).
Long
term
growth
After
year
10,
long
term
growth
is
1%
(perpetual
growth
rate)
Figures
One
million
is
written
1
000
000
One
million
and
twelve
cents
is
1
000
000.12
