Keep Aster Textiles solvent
Fictional case. Start with ₹10 lakh. Pay suppliers ₹18 lakh next period and collect ₹30 lakh in the following period. Pick a response to the timing gap.
Next decision · Evaluate a capital project
Capital budgeting desk
An equipment investment pays a single end-of-year cash flow. Compare its value with the up-front cost.
Net present value
9.09 ₹000
−100 today + 120 ÷ (1 + 10%). The future cash flow is discounted once because it arrives in one year.
Discount the ₹120k inflow at 10% and subtract ₹100k. The project clears the financial hurdle.
Sensitivity to investment (₹000)
0109.09
−0 today + 120 ÷ (1 + 10%). The future cash flow is discounted once because it arrives in one year.
7534.09
−75 today + 120 ÷ (1 + 10%). The future cash flow is discounted once because it arrives in one year.
150-40.91
−150 today + 120 ÷ (1 + 10%). The future cash flow is discounted once because it arrives in one year.
225-115.91
−225 today + 120 ÷ (1 + 10%). The future cash flow is discounted once because it arrives in one year.
300-190.91
−300 today + 120 ÷ (1 + 10%). The future cash flow is discounted once because it arrives in one year.
Outputs in ₹000. Other assumptions held fixed.
Cost of capital explorer
Blend market-value debt and equity weights under a hypothetical tax shield.
Weighted average cost of capital
9.6 %
60% equity × 12% cost of equity + 40% debt × 8% cost of debt × (1 − 25%). Weights use market values.
The remaining 60% is equity. Sensitivity holds both financing costs fixed for illustration.
Sensitivity to debt weight (%)
012
100% equity × 12% cost of equity + 0% debt × 8% cost of debt × (1 − 25%). Weights use market values.
2510.5
75% equity × 12% cost of equity + 25% debt × 8% cost of debt × (1 − 25%). Weights use market values.
509
50% equity × 12% cost of equity + 50% debt × 8% cost of debt × (1 − 25%). Weights use market values.
757.5
25% equity × 12% cost of equity + 75% debt × 8% cost of debt × (1 − 25%). Weights use market values.
1006
0% equity × 12% cost of equity + 100% debt × 8% cost of debt × (1 − 25%). Weights use market values.
Outputs in %. Other assumptions held fixed.