This project appears viable and attractive to the private sector.
The financial calculations are shown in Table 3-29. The overall return to capital, (FIRR), of 17.75% percent is well over the WACC of 14.20 percent. The return to equity is 24.80 percent.
The overall NPV of the project is P29.97 million which, is well above zero. The NPV on equity is similarly high, suggesting that the project could support a higher loan to equity mix.
The payback period after taxes is 6 years. This result implies that' there is no need to provide tax incentives to attract the private investor.
Financial Viability Indicator Results
• | FIRR (%) | 17.75 |
• | IRR on Equity (%) | 24.80 |
• | NPV on Project (million pesos) | 29.97 |
• | Payback Period After Tax | 6 years |