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PEAT VISUAL GUIDE - Real Options Valuation, Inc.

1. m mim m ef D Jm mm e P wi ame _ um GE Ze a a a wf ml ed rE e ke P er Em aa a m a M em LK e e WW a Er F Em wi ig mT z west w eeng i d GG e ms Deng E i m p aan zm am Reg _ Gar elt Ge a i m i ES wel Ze w ef eee Ba ae a Gs PS e ef der wl w ep mm Ee PEAT VISUAL GUIDE VOLUME 2 Quick Getting Started with Discounted Cash Flow Module and Integrated Risk Management Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com Instructions e This is a quick getting started guide not a detailed user manual See the user manual and related books for more technical information e Textin RED is instructions text in BLUE is notes for your information only e This visual guide showcases the Discounted Cash Flow module and summarizes how the following methods are implemented and run in PEAT using an example model DCF Metrics Net Present Value Internal Rate of Return Modified Internal Rate of Return Profitability Index Return on Investment Payback Period and Discounted Payback Period for individual projects options and within a Portfolio Analytics Tornado Analysis for identifying critical success factors and
2. Projects Project10 Portfolio Analysis Save h Information and Details Save As g Year I 2043 Discount Rate kal 10 00 Marginal Tax Rate CS 28 50 PEAT Discounted Cash Flow RM he 7 Load Example PEAT Discounted Cash Flow JV p TER EEN PEAT KVA Analysis Se ma mo Ser i PEAT Lease vs Buy 225 850 12 225 850 12 275 850 12 225 850 I PEAT Oil and Gas Model 225 850 12 225 225 850 12 225 225 850 12 225 225 850 ir Saudi Aramco Case 1GCC Case 27 888 82 27 888 82 27 888 82 27 888 Direct R amp D Saudi Aramco Case Midyan Field Development 24 896 68 24 896 68 24 896 68 24 896 Manufacturing Saudi Aramco Case RT Asphalt EX ws IM Ras Tanura 829 89 829 89 829 89 829 86 d Fabrication Saudi Aramco Case Wasit Sai iai Hasbah Gas i a L al 51 25 51 25 31 25 Direct COGS Tm G I SA 8 Joer 2 111 00 2 111 00 2 111 00 2 111 0 Gross Profit Operating Income 601 41 10 596 05 199 457 37 199 457 37 199 457 37 199 393 31 197 961 30 197 961 30 197 961 30 197 961 Indirect Expenses General amp Administrative 799 42 3 073 28 9 212 61 9 212 61 9212 61 9 212 61 9 212 61 10 877 49 9 567 71 9 567 Sales and Administrative 0 00 31 00 703 00 703 00 703 00 703 00 703 00 703 00 703 00 703 0 Marketing and Advertising 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 Operations 0 00 0 00 1 248 07 1 248 07 1 248 07 1 248 07
3. 1 248 07 1 248 07 1 248 07 1 248 0 Maintenance 799 42 2 997 82 4 758 48 4 758 48 4 758 48 4 758 48 4 758 48 6 423 36 5 113 58 5 113 5 Foreign Transactions 0 00 0 00 1 506 00 1 506 00 1 506 00 1 506 00 1 506 00 1 506 00 1 506 00 1 506 C Channel Partners 0 00 44 46 997 06 997 06 997 06 997 06 997 06 997 06 997 06 997 06 EBITDA Earnings Before Interest Taxes Depreciation and Amortization 198 01 7 522 77 190 244 76 190 244 76 190 244 76 190 180 70 188 748 69 187 083 81 188 393 59 188 393 Depreciation 0 00 9 874 00 39 827 00 39 074 00 38 161 00 37 206 00 36 172 00 35 223 00 34 478 00 33 835 Amortization 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 EBIT Earnings Before Interest and Taxes 198 01 2 351 23 150 417 76 151 170 76 152 083 76 152 974 70 152 576 69 151 860 81 153 915 59 154 558 _ nanm emman momes m7715 Iaunaaze icoane ionen romm enoa onma t Open Do not forget to click on some of the menus to explore additional settings that are available such as performing data and model encryption load example files start new or open existing models change international settings foreign languages and decimal settings as well as add delete rename duplicate rearrange Projects and Options HE di Jp iS Copyright 2005 2013 Dr Johnath
4. 50 60 70 80 90 95 100 Value 316 418 2968 375 020 2876 398 989 0423 446 267 8992 487 750 7225 519 787 3105 544 090 8299 578 507 9122 597 477 4477 628 450 5283 691 181 3308 712 966 7966 795 149 8161 Statistics Trials Mean Median Stdev CV Skew Kurtosis Minimum Maximum Range Value 100 542 428 7105 544 090 8299 106 086 8848 19 5578 0 0088 0 4796 316 418 2968 795 149 8161 478 731 5193 4 Decimals The risk simulated results and respective statistics are shown in this tab You can select the distribution tails left right two tails type in confidence levels and obtain percentiles or enter in percentiles to calculate the confidence values edit modify copy the charts and extract the simulated results etc la Ve Jp ons GIE x Jl ASI 16 Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Risk Simulation Overlay Results Select one or more output results and the chart type 3 EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL Jetzen File Edit Projects Report Language Decimals Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform for
5. Change inNet Working Capital 0 00 CFR Accounts Receivables 3 617 60 A5D 000 AN BEN DO NN _ 850 900 on 750 ONDON 7 L j d all oa 100 U Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com
6. Detailed Analysis Chart the max returns or the min cost risks Uses indude managing l inventories financal portfolio allocation product mix project selection etc ff Method Decision Variables Statistics Objectiva Static Optimization Name Optimization Efficent Frontier Runs optimization without any simulations This method is usually run to determine the ee ok i e 2 i Optimization Portfolio Optimization Project Selection Returns initial optimal portfolio before more advanced optimizations with simulation of uncertainties are applied Optimization Portfolio Optimization Project Selection Risk Optimization Portfolio Optimization Project Selection Sharpe i Dynamic Optimization Optimization Portfolio Optimization Sharpe Ratio A simulation is first run to capture the uncertainties of inputs where the statistical results Optimization Portfolio Optimization 100 Assets of the simulation are then applied in the model and an optimization is then run this is Optimization Portfolio Optimization 100 Projects known as simulation optimization Optimization Portfolio Optimization 30 Assets Optimization Portfolio Optimization 30 Projects Random Seed Optimization Portfolio Optimization 50 Assets Number of Simulation Trials Optimization Portfolio Optimization 50 Projects Optimization Simple Constrained Sum Maximization Stochastic Optimization Optimization Simple Profit Maximization Equivalent Const
7. You can compare the dynamic simulated results of all your options A simulation must first be run before you can obtain any results Choose if you wish to compare all options as standalone Analysis of Alternatives or against a base case Incremental Analysis ANALYSIS OF ALTERNATIVES AND BASE CASE INCREMENTAL ANALYSIS Analysis of Alternatives No Base Case C Incremental Analysis Choose Base Case Option 1 Economic Results Net Present Value NPW 2 Decimals OPTIONS Optioni Option Option 3 Option 4 Option 5 Option6 Option7 Optio 545 410 42 1 079 535 22 18 725 33 1 937 62 30 406 70 48 841 38 1 047 018 61 25989 Ge El amp bl E t tees ZS OO a edi 1 088 791 18 19 483 32 2 438 84 30 201 12 48 922 04 996 274 73 287 67 m GE A ber Ra Hea EI 3 365 99 457 400 00 15 435 45 11 360 23 19 683 29 12 434 57 976 562 42 299 411 EI Di a E a B bh j ariance ENN 9 54E 011 8 96E 42 37 5 115 20 0 10 012 rtosis 073 097 os 090 108 A1 ini 24 852 54 16 894 20 823 12 eis 2 jaam Du 3 Kb i de Ka gjss S 3 Z 3 imum 87 244 55 2 222 651 gel 56 602 33 26 100 52 79 858 83 74 573 75 2 917 827 34 357 46 ange 176 239 08 2 112 055 60 953 06 95 274 28 57 679 56 3 744 940 99 1 180 58 o Percentile 1 005 47 110 596 35 19 449 11 24 852 54 15 415 46 16 894 20 827
8. 111 00 2 111 00 2 111 00 2111 Gross Profit Operating Income 601 41 10 596 05 199 457 37 199 457 37 199 457 37 199 393 31 197 961 30 197 961 30 197 961 30 197 961 Indirect Expenses General amp Administrative 799 42 3 073 28 9 212 61 9 212 61 9 212 61 9 212 61 9 212 61 10 877 49 9 567 71 9 567 Sales and Administrative 0 00 31 00 703 00 703 00 703 00 703 00 703 00 703 00 703 00 703 0 Marketing and Advertising 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 g Operations 0 00 0 00 1 248 07 1 248 07 1 248 07 1 248 07 1 248 07 1 248 07 1 248 07 1 248 0 Maintenance 799 42 2 997 82 4 758 48 4 758 48 4 758 48 4 758 48 4758 48 6 425 36 5 113 58 5 113 5 Foreign Transactions 0 00 0 00 1 506 00 1 506 00 1 506 00 1 506 00 1 506 00 1 506 00 1 506 00 1 506 C Channel Partners 0 00 44 46 997 06 997 06 997 06 997 06 997 06 997 06 997 06 997 06 EBITDA Earnings Before Interest Taxes Depreciation and Amortization 198 01 7 522 77 190 244 76 190 244 76 190 244 76 190 180 70 188 748 69 167 083 81 188 393 59 166 393 Depreciation 0 00 9 874 00 39 827 00 39 074 00 38 161 00 37 206 00 36 172 00 35 223 00 34 478 00 33 835 Amortization 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 EBIT Earnings Before Interest and Taxes 198 01 2 351 23 150 417 76 151 170 76 152 083 76 152 974 70 152 576 69 151 8
9. 506 00 WI 1 506 00 1 506 00 1 506 00 E Channel Partners oo 4446 99706 997 06 99706 99706 99706 99706 99706 99706 997 06 another tab ee sor 1 248 07 Pal UPUONS okey are neater MPN EINEN EI OH TE Dublin California admin realoptionsvaluation com i dlma Wi REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Discounted Cash Flow Discount Rates and load an example to run Z CAUsers Dr Johnathan Mun Desktop Excel Links rovprojecon ROV PROJECT ECONOMICS ANALYSIS TOOL File Edit Projects Report Language Decimals gt een Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Custom Calculations Project 1 Project 2 Project 3 Project 4 Project 5 Project 6 Project 7 Project 8 Project 9 Project 10 Portfolio Analysis Discount Rated 1 jee Simple WACC m 3B THE DISCOUNTED CASH FLOW APPROAC
10. CRL Hrana Atis you can exit the project and salvage the asset s or project s intellectual m hma to Wee further rose Se Eben executing the next phase or execute a termination for convenience while at the same time recovering some value Remember that you can only execute an option to abandon if you already own the Asset Value Present Value of Net Benefits 120 00 Manual Input H asset or project otherwise please use the Option to Wait and Defer if you are just exiting a project without further execution Enter a net salvage value after expenses of the amount that can be recovered at time of abandonment In this option the implementation cost is not used you can enter any placeholder value as an input Volatility Annualized Risk 75 25 00 Manual Input Maturity Total Years to Option Expiration 5 00 Risk Free Rate Riskless Discount Rate Di 5 00 0 00 Lattice Steps Typically 100 to 1000 100 Additional Single Phased Option Assumptions 2 Phased Option Proof of Concept R amp D Step 3 Enter the real options input assumptions Basic Option Assumptions Continue with development Salvage d Abandon the project and sell the project s asset or intellectual property and Step 5 Save Edit Model Optional g obtain some salvage value Model Name Project 1 Abandonment Option Project 3 Expansion Option Project 8 Two Phased Investment Edit The most commonly used real options models are preset for you in t
11. Go to Knowledge Center Step by Step Procedures and step through the training material Se O Users Dr Johnathan Mun Desktop crash rovprojecon ROWY PROJECT ECONOMICS ANALYSIS TOOL File Edit Options Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Step by Step Procedures Basic Project Economics Lessons Getting Started Videos Dashboard Knowledge Center Welcome to ROV s Project Economics Analysis Tool PEAT Knowledge Center Here you will find quick getting started guides and sample procedures that are straight to the point to assist you in quickly getting up to speed in using the software Click on the PREVIOUS and NEXT buttons to navigate from slide to slide or to view the Getting Started Videos Certain elements in the figures below are also highlighted in yellow to attract your attention to these key areas discussed in the slide When you start PEAT first select the Module you wish to run e g Discounted Cash Flow Model or Oil or Gas Project Economics additional
12. Modules will be added in future releases then select NEW to start a new model from scratch OPEN open an existing model or LOAD EXAMPLE to load an already completed example model this latter choice is useful when trying to learn the functionalities of the software I AI Project Economics Analysis Tool rT Copyright 2012 2013 Real Options Valuation Inc ETS Applying Integrated Risk Management methodologies Monte Carlo l risk simulation strategic real options stochastic forecasting business Discounted Cash Flow Model analytics and portfolio optimization to project and portfolio Oil and Gas Project Economics economics and financial analysis Lease vs Buy Knowledge Value Added Comparable IRM Analysis Load Example L ge You can also learn the basics of PEAT through the knowledge center s procedures illustrations Step back and forth from slide to slide while reviewing the text You can create your own custom training materials for your staff and company s personnel if you wish by following some simple instructions in the user manual Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com NX Valuation Ry A 1 d UDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved Go to Knowledge Center Basic Project Economics Lessons CA Users Dr Johnathan Mun Desktop updated example rovprajecon ROV PROJECT EC
13. ROV Decision Tree for stochastic simulations on decision trees ied JDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com N dia S I W REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Options Valuation and double click on any of the saved models to run them 5 Users Dr Johnathan Mun Desktop updated example rovprojyecon ROV PROJECT ECONOMICS ANALYSIS TOOL ES File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation jons ed Options Valuation Forecast Prediction Portfolio Optimization Knowledge Center Step 1 Select the option execution type 9 American P European This tab allows you to model and value the most common real options strategies For more complex real options models e g changing inputs over time simulated inputs complex customized options nested options et cetera please use the Real em Options SLS software instead Single Phased and Single Asset Options optentoabenden E Multiple Phased Sequential Options Result A Load Example
14. their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints ge r a Jee e F 7 Discounted Cash Flaw Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center fSimulation Results Overlay Results Select the Option to simulate and set the relevant distributional input assumptions Then run the simulation and review the results d Set Input Assumptions Analysis of Alternatives Dynamic Sensitivity Step 1 Choose an Option to set input assumptions Step 2 Click on the distributional icon to set your simulation assumption You can turn an assumption on or off using the checkbox Name Option 1 Option 2 ae arginal Tax Revenues Sales Revenue Global Sales 2016 Option 3 Revenues Sales Revenue Global Sales 2017 G ss Revenues Sales Revenue Global Sales 2018 Option 8 Revenues Sales Revenue Global Sales 2019 Probability Distribution Revenues Sales Revenue Global Sales 2020 Min Step 3 Run Simulation Simulation Options Revenues Sales Revenue Global Sales 2021 Likely Simulate All Options At Once Revenues Sales Revenue Global Sales 2022 Max D Simulate Selected Option Only Revenues Sales Revenue Global Sales 2023 ere Simu
15. 000 00 1 Option2 39537 2801 528 181 82 1 Options 394 25 59 55 000 00 1 Option4 3 50 26 59 55 000 00 1 Options 480 20 82 83 000 00 1 Option6 490 20 41 74 161 82 1 Option 440 22 72 2 440 909 09 1 1 1 1 Saved Model Optimization Budgets and Projects Optimization Effident Frontier Budget Optimization Eficient Frontier Projects Noneconomic Variables Weighted Average of Customs Noneconomic Variables Satisfy Demand Model Name Optimization Effident Frontier Budget Step 1 Select the Decision Variable type Discrete Binary Go or No Go Decision Continuous Budget Allocation Across the Portfolio Step 2 Select an Objective PL LS DI Options 4 69 21 32 1 535 818 18 Option 218 45 69 74 421 49 Option10 EES 30 13 63 042 37 BEE E E E EE HEH Double click on any saved model to run it or create your own portfolio optimization models here You have to first set up the model s Decision Variables Objective and Constraints You can set variable constraints with a range to run an investment efficient frontier analysis CW N i di Jp IUNES Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com Hat Ez REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Portfolio Optimization Optimization Results DE EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL ver Ea File Edit Projects Report
16. 000 1 000 000 1 500 000 2 000 000 Copy Chart J You can overlay multiple risk simulated results over one another using this tool Risk Simulation must first be run in order for this tab to be populated You can add chart specific percentiles and certainty lines as well as modify the chart s look and feel or copy the chart for pasting into Excel or PowerPoint 1 i d UDUONS MATIPA AEA a a E rights reserved Dublin California admin realoptionsvaluation com NW Valuation Ey REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Risk Simulation Analysis of Alternatives S O Users Dr Johnathan Mun Desktop updated example rovprojecon ROV PROJECT ECONOMICS ANALYSIS TOOL DER File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center E E S i SE e T 7 Le e S 7 Set Input Assumptions Simulation Results Overlay Results L Analysis of Alternatives Dynamic Sensitivity SS See EES E
17. 113 65 823 12 z z j GI ud Co En zl l Ta Ao iD 86 88 5 Percentile 377 855 2 16 788 69 432 815 29 709 88 0 Percentile 73 679 88 31 794 91 648 78 448 521 9 451 82 488 540 13 223 8 11 364 30 37 328 13 93 610 06 551 91 Cl ke Peo D u 18 193 93 41 533 43 404 668 27 469 29 Cl 0 Percentile 0 Percentile LA Eh Sch 14 837 70 951 689 97 1 366 5 683 320 17 379 15 2 43 996 274 73 287 67 76 4259 5 717 75 183 20 0 Percentile 610 582 9 779 77 60 723 Pi z E SE HE S un CIS mn DIR 3 0 Percentile 642 293 13 105 99 54 734 16 777 98 158 426 667 41 42 135 11 19 280 69 225 21 56 602 33 26 100 52 _ a es S t La Bar Copy Grid Copy Chart 5 Percentile 00 Percentile a lei 685 578 3 14 3047 7 244 5 q a a ae E D oD D m m m m Ge cb ll Get m ef tal m m m m m Ei Ev LES Ei m m Im m Cl El EA UMW yy ay ey ey ay ay ay ap HH E J Similarly you can view each Project or Option s risk simulation results side by side as an Analysis of Alternative or as Incremental Analysis please be aware that some statistics may not be appropriate to use for incremental analysis due to the nature of simulations ical UDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com N Valuation W REAL OPTIONS VALUATI
18. 14 Gab SO CAPITAL INVESTMENTS EM Depreciation Escalation 3 Main Facilities Irvestrment Bech 1 Processing Facilities 70 00 5000 goo 30000 40 000 10 000 5 007 3000 37000 13 000 Pipeline Construction Total REVENUES M pas He enug Uke e SJ DR DAS 23 000 25 000 258 000 23 000 d Be 7 000 70 000 zodenzate Revene Total 58 000 Ti 25 005 EXPENSES 5M viell Maintenance fro 3 000 Processing Cost O amp M 5000 5 000 ap a A9 ee eb Lich ai EE eg Some basic videos are also available as part of the PEAT tool to get you up to speed quickly on using the software application Again you can create and embed your own corporate training videos if required Dublin California admin realoptionsvaluation com a2 Real Options RA AE EEE TEE i REAL OPTIONS VALUATION Inc www realoptionsvaluation com Valuation ES Click on the menus and explore C Users Dr Johnathan Mun Desktop updated example rovprajecon ROV PROJECT ECONOMICS ANALYSIS TOOL ea File Edit Options Report Help l TE TE Cash Flow Model Profile p a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform New Oil and Gas Project Economics Profile pee y al ie R EEE Be bns Valuation Forecast Prediction Portfolio Optimization Knowledge Center New Knowledge Value Added Comparable IRM Analysis Profile Project7 Projects
19. 60 81 153 915 59 154 558 Tatar nt DOC E Tin 39 T0007 GE V7 TAT AC 1n FIA 30 10047 C3 13 767 D I 19 303 7h 141 C74 37 o ATT A l t 4 In your own model simply enter the required inputs input boxes or Copy Paste from Excel or another data source You can add reduce the number of rows to show for each category and Copy Grid to paste into Excel Word PowerPoint etc HE d UPUONS elei EdEBkEteld TOEEI NIE TO ETA Dublin California admin realoptionsvaluation com D qdiUdtike E REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to DCF Project 1 Cash Flow Ratios and see the sample inputs and results EXAMPLE ROW PROJECT ECONOMICS ANALYSIS TOOL DER File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center J Custom Calculations Project1 Project2 Project3 Project4 Project5 Project Project7 Projects Projecto Project10 P
20. 935 ka RECHERCHER Net Present Value NPV with Terminal Value Net Present Value NPV Net Present Value NPV MM Internal Rate of Return Investment Portfolio View Net Present Value NPV E S bere FRE H HOO h E S t Piper PEE UNO ase ORR E e ITE A o Yow H Investment Portfolio View Project1 Net Present Value NPV Project 2 C Project 3 Project 4 e Project 5 Project Project Projectd 500 000 1 000 000 150 pg Net Present Value NPV with Terminal Value Projects Internal Rate of Retum RR All projects are summarized in this tab as a Portfolio You can now compare all single point results of the main project economic metrics modify and view different charts copy the results and charts to Excel or PowerPoint and change details as well as the look and feel of the charts as required ied JDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com NW Valuation E REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to DCF Custom Calculations and play with the worksheet and its functions as well as perform some Live Excel Links Gl fl vi 7 Excel Source File xls Compatibility Mode Microsoft Excel Home Insert Page Layout Formulas Data Review View Developer Risk Simulator cut Se ee i S S CC kaoigen 1 mm AutoSum gt A D Bees Arial 9 A A gt
21. E bine face optimization to project and portfolio economics and GE financial analysis Oil and Gas Economics Oil Field Reserves C 3 Project Management Dynamic Schedule and Cost Analysis gt Public Sector Analysis Knowledge Value Added SE EE Customized Encrypted Models Load Example New Open Exit Saudi SE FPD andar Sg Mode Saudi Arameo FPO Expanded Economic Model Saudi Aramco CFPO Specialized Corporate Finance Projects Saudi Aramco Joint Venture Decision Analysis Saudi Arameo New Business Development Saudi Aramco Coporate Planning Portfolio Management Northrop Grumman IRD Model Northrop Grumman S Curve Analysis Additional customized Modules will be added over time Click on Load Example to follow along and walk through this Visual Guide 1a JJ Jo Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com dLUat AWA E REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to DCF Project 1 DCF to see the sample model data loaded and ready to go 5 EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL o ea File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction m
22. H Model Detaled WACC Cost Elements Use Constant Growth Rate Use Payout Ratio and Return on Equity Stock Price Po Gi 32 00 1 COST OF DEBT r4 1 H Dividend Payment D 1 82 ee Seen Constant Growth Rate g 5 365 Number of Payments Per Year 2 00 Payout Rate 63 000 Annual Coupon Rate 9 000 Return on Equity 14 500 ies ias ai 1 000 00 Stock Floatation Cost F 5 000 Current Bond Price 904 91 Cost of Common Stock r 11 352 cece EE E meda 3C THE BOND YIELD PLUS JUDGMENTAL RISK PREMIUM APPROACH PREE e E Se Judgmental Over Bond Yield Risk Premium 3 000 After Tax Cost of Debt r ee Equivalent Corporate Bond Annaulized Yield 9 000 2 COST OF PREFERRED STOCK Cost of Common Stock L 12 000 sare re eres 3D COMPARISON OF CAPM DCF BOND YIELD PREMIUM Par Value 100 00 Geh SE Stock Flotation Cost 2 500 E Net Preferred Stock Issue Price E 97 50 Bond Yield Plus Risk Premium r 12 000 ee E EE 6 8 205 Average Cost of Common Stock r 11 651 3 COST OF COMMON STOCK r 4 WEIGHTED AVERAGE COST OF CAPITAL WACC 3A THE CAPM APPROACH Corporate Marginal Tax Rate 40 000 Risk Free Rate r 500 Weight of Debt 30 000 Market Return r__ 1050 Weight of Preferred Stock 10 000 Stock Beta 1 20 Weight of Common Stock 60 000 Cost of Common Stock r 11 600 Weighted Average Cost of Capital WACC 8 891 You can com
23. Language Decimals Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Knowledge Center Optimization Settings Optimization Results Advanced Custom Optimization The optimization run has been completed Risk Optimizer Report Date Fri Jul 26 11 41 42 2013 Runtime 0 41 seconds Objective Function 6 9409 7 8211 8 0545 8 0545 8 0545 PEER TILE a ee deeg Frontier Variable 2 000 000 2 500 000 3 000 000 3 500 000 4 000 000 Problem Parameters Optimized Constraint 1 978 800 2 487 000 2 718 600 2 718 600 2 718 600 Number of variables 10 S Number of Functions A Option Objective function will be MAxXimized Starting Values Dption3 Functions Option4 Function Initial Lower Upper Option gt NO Name Status Type Value Bound Bound Option6 1 G RAGE 1 9768822 006 1 797692 308 22 006 Option 2 D OBI 6 94092 H 4 mt t Ontion Chart Type Standard 20 Line Option10 E Show Values on Chart Objective 6 6 1500000 2000000 2500000 3000000 3500000 4000000 4500000 Double cl
24. NPV Select the Saved Scenario to Compute Show results with D decimals Scenario table is for NOTE The Row variable down is Revenues Sales Revenue Global Sales and the Column variable across is DCF Discount Rate 20 00 21 00 22 00 23 00 24 00 25 00 26 00 27 00 28 00 29 00 30 00 31 00 32 00 33 00 34 00 35 00 36 00 37 00 38 00 3 720 563 3 790 671 3 780 779 5 410 888 5 840 996 9 871 104 9 901 212 9 931 320 9 961 429 3 991 537 6 021 645 6 051 753 6 081 862 6 111 970 6 142 078 6 172 186 99 179 79 617 61 782 45 473 30 515 16 758 EREECHEN 41 808 9323 35 713 You can view all your saved scenario models here by selecting them from the droplist complete with color codes You can copy the results grid as required for pasting into PowerPoint or Excel Dublin California admin realoptionsvaluation com ae Heal Options RAZI EEA T EEIN E EEA E d REAL OPTIONS VALUATION Inc www realoptionsvaluation com uation EE D Go to Risk Simulation Set Input Assumptions Double click on a saved simulation model to run e g All Simulations Model G Users Dr Johnathan Mun Desktop updated example rovproyecon ROV PROJECT ECONOMICS ANALYSIS TOOL as File Edit Projects Report Help Welcome to the ROY Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model
25. ON Inc www realoptionsvaluation com SETS Go to Risk Simulation Dynamic Sensitivity and select any output from the droplist E C Users Dr Johnathan Mun Desktop updated example rovprojecon ROV PROJECT ECONOMICS ANALYSIS TOOL File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center a e F aga p H d H D Set Input Assumptions Simulation Results Overlay Results Analysis of Alternatives Dynamic Sensitivity The simulation run has been completed Simulate Time 52s Dynamic Sensitivity is run by first performing a Monte Carlo Risk Simulation to model its dynamic interactions and impacts on the selected output variables To get started make sure you have a simulation already run then choose the Option and Output Variable you wish to test and cick Compute to run the analysis Select the Option and Output Variable to run Option 1 Net Present Value NPV demm Copy Charts CHS HM BttEeeoP Pk Ut OgnS O8 RK E Nonlinear Rank Correlation Contri
26. ONOMICS ANALYSIS TOOL File Edit Options Report Help Welcome to the ROY Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Dashboard Knowledge Center Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Step by Step Procedures Basic Project Economics Lessons Getting Started Videos Lesson 06 The Profitability Index PI is the ratio of the sum of the present value of cash flows to the initial cost of the project which measures its relative profitability A project is acceptable if PI gt 1 and the higher the PI the higher the project ranks PI is mathematically very similar to Return on Investment ROT PI is a relative measure whereas ROT is an absolute measure PI returns a ratio the ratio is an absolute value ignoring the negative investment cost while ROI is usually described as a percentage Mathematically NPV IRR MIRR and PI should provide similar rankings although conflicts may sometimes arise and all methods should be considered as each provides a different set of relevant information CF Pr 2 l k _ Benefit _ PV Cash Flows Cr Cost Initial Cost 2 ae Ben
27. Output Variable to run Sensitivity Revenues 5 419 480 60 RE e ao er 11 00 WE 31 35 P 275 000 00 TI 225 000 00 DCF Discount Rate 9 00 DCF Marginal Tax Rate 25 65 Show the top Variables DCF CAPITAL INVESTMENTS Show results with DCF Depreciation decimals Select the granularity of the sensitivity analysis dividual Unique Inputs ine Items fariable Groups Direct Cost DCF Interest Indirect Expenses DCF ChangeinNet Working Capital CFR Accounts Receivables 887 382 10 FR 726 039 90 855 932 74 FR 700 303 60 171 630 18 J 140 594 88 305 510 32 E 249 962 99 0 00 3 817 60 Lack Copy Chart Copy Grid Option 1 Net Present Value NPV Base Value 608 388 29 Input Changes Inputs Output Downside Output Upside Effective Range Input Downside Input Upside Base Case Value 471 501 67 745 274 91 293 773 24 5 419 480 60 6 623 809 62 6 021 645 11 E 694 674 44 533 487 06 161 187 38 11 00 10 00 642 603 76 574 172 81 68 430 95 25 65 31 35 Revenues DCF Discount Rate Ps DCF Marginal Tax Rate CG DCF CAPITAL INVESTMENTS DCF Depreciation 633 388 29 583 388 29 275 000 00 629 216 89 587 559 68 41 657 22 726 039 90 887 382 10 806 711 00 Direct Conte APS A71 SS BOT 305 D TAN 308 AN RR Q37 7A ECKE You can view the Tornado analysis critical success factors of each Project s economic metrics copy the chart and sensitivity results change the look and fe
28. Report Language Decimals Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Set Input Assumptions Overlay Results Analysis of Alternatives Dynamic Sensitivity The simulation run has been completed Select the Option and Output Variable to view the results Project 1 Net Present Value NPV SG New RA GG AN NM Je d Jk D H OO am OS Ry Be Bar Type Br Be BarColor Line Index 1 74 94 x A At LI DataLabels custom Text Properties S Curve Color Project 1 Net Present Value NPV Frequency 4 00 3 00 2 00 1 00 DO 316 418 30 412 164 60 507 910 90 603 657 21 699 403 51 Show vertical lines at Percentiles E aen 582 00 Confidence CopyChart Chart Show Gridlines a Certainty Values bss d Le comet and show ines at 020 29 712 966 80 Extract Simulation Data Open Save 795 149 82 Two Two Tais Percentile 0 5 10 20 30 40
29. Scenario Analysis for identifying hot spots Risk Simulations running tens of thousands of simulation trials to determine probabilistic risk metrics comparing dynamic sensitivities of inputs and comparing risk metrics and returns across multiple projects Real Options Strategies visual representation of strategies with decision trees and Strategy trees Real Options Valuation computes the values of each individual real options path Portfolio Optimization budget allocation and optimal project selection subject to budget and other strategic constraints Management Dashboards create multiple results dashboards for management Knowledge and Training Center quick lessons on using PEAT project economics basics and getting started videos la gt ned Uptions He Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com 2 x diUa ti REAL OPTIONS VALUATION Inc www realoptionsvaluation com 1 Start PEAT and Select Corporate Investments Stochastic Discount Cash Flow DCF Analysis 2 Click Load Example D Project Economics Analysis Tool Copyright 2012 2013 Real Options Valuation Inc Applying Integrated Risk Management methodologies Monte Carlo risk simulation strategic real options Corporate Investments Buy vs Lease stochastic forecasting business analytics and portfolio a Oil and Gas
30. T TO EQUITY RATIO DE You can click on the droplist to view results in dollars or in relative percentages View Full Grid or to Copy Grid to paste into another software like Excel KN Gd JDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com c Jd LSD KE REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to DCF Project 1 Economic Results and see the computed results No other actions are required other than playing with some dropilists fl EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL cl la File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Options Strategies Forecast Prediction Portfolio Optimization Project Portfolio Analysis 1 Discounted Cash Flow Model DCF 3 Economic Results 4 Information and Details NPY M Select the Discounting Convention to Use Discrete Continuous 794 590 07 Select the Cash Flow to Use 694 674 44 Terminal Period Annualized Growth Rate Economic Indicators Economic Indicators Net Present Value NPV 608 388 29 Pro
31. Years to Option Expiration Lattice Steps Typically 100 to 1000 12546 12545 ooo 90 00 11000 10000 Project 1 Abandonment Option Project 3 Expansion Option Project 8 Two Phased Investment Step 5 Save Edit Model Optional Model Name Double click on any saved model to run it You can then view the model s sensitivity tornado or scenario analysis results E JDUONS e Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com P TA Y K Q L AN l 22 Go to Forecast Prediction and double click on any saved model to run O Users Dr Johnathan Mun Desktop updated example rovprojecon ROV PROJECT ECONOMICS ANALYSIS TOOL cl ea File Edit Projects Report Help Welcome to the ROY Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction portfolio Optimization Dashboard Knowledge Center STEP 1 Data ae eee ke Grieg application Options STEP 2 esi Choose analysis and enter parameters required example inputs bel
32. an Mun All rights reserved Dublin California admin realoptionsvaluation com uation We REAL OPTIONS VALUATION Inc www realoptionsvaluation com Click on the Report Report Settings menu az Ve EA H uUa tio N Copyright 2005 2013 Dr Johnathan Mun All rights reserved 34 V Select All 1 Froject Economics All Options After completing and running your models i e having completed and run Z Portfolio Analysis e P e e e 2 Applied Analytics any or all of the appropriate tabs project economics advanced analytics SE risk simulations forecasting real options and optimization you can H Scenario Output Table e e I 3 Risk Simulation generate a report in Excel A quick hint here is that once you click Run Gage Simulation Results di H Report please make sure to be hands off the computer until the report 17 Overlay Results Analysis of Alternatives IS comp lete Dynamic Sensitivity Options Strategies Current Strategy Tree Options Valuation Inputs Assumptions W Sensitivity i Agee e W Tornado Xi if els eetl Microso ce W Scenario File Home Insert Page Layout Formulas Data Review View Developer Risk Simulator Risk Extractor cut g 0 Portfolio Optimization S Calibri SIE Ag Sr Gd Wrap Text General E y Normat pn Ei Current Model Only P Format Painter B E si r a SS Z E faMerge amp Centerr 7 9 3 Zeen ropa Ne
33. bution to Variance DCF Discount Rate Gei DCF CAPITAL INVESTMENTS 2016 0 01 02 03 04 05 06 OF 08 OD 1 D 01 02 03 04 05 06 OF 08 08 1 Tornado shows a static sensitivity whereas a Dynamic Sensitivity shows the impacts of each probabilistic input assumption on the risk simulated outcome where all inputs are changed simultaneously ied JDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com diUdticD SE REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Options Strategies e 3 O Users Dr Johnathan Mun Desktop updated example rovprojecon ROW PROJECT ECONOMICS ANALYSIS TOOL File Edit Projects Report Help Welcome to the BON Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints pe en Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center ES 9c oao sa afewa D Qaas EEN Eist Multi Stage Development Expand in reality an R amp D project will yield intellectual property and patent nights that the firm can easily license off Abandon In additio
34. d run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation EE Custom ations Project 1 Project 3 Project 3 Project 4 Project 5 Project 6 Project 7 Project 8 Project 9 Project 10 Porth lio Analysis Discount Rates Calcul Portfolio Anal eren of e Economic Results Project 1 Project 2 Project 3 Project 4 Project 5 Project 6 Project 7 Project 8 Project 9 Project 10 No Base Case Net Present Value NPV 605 966 21 113 128 55 25 361 10 17 041 94 59 061 34 69 507 57 728 339 38 361 833 73 22 923 68 20 150 38 Ini ental Analysi EE Net Present Value NPV with Terminal Value 724 066 65 218 004 89 53 306 45 120 157 44 22 422 35 1 124 579 59 538 114 39 13 275 72 17 635 81 SEN Internal Rate of Return IRR 2912 1031 1363 1317 1789 2992 11 20 1243 11 29 VIE tan tom Internal Rate of Return MIRR 15 03 1011 1 1 1268 17 36 1039 10 88 10 1 epps Pe me ir ae ie on os im oe f o a on Investment RO 24219 753 3741 3017 6196 176 85 28 47 46315 Payna eroa 0 Cam ioeo eases rareo 52008 smo aoso esse orm e1025 wi Discounted Payback Period DPP 48386 289398 124596 128518 8399 44399 223462 16 5
35. d save the scenario settings for future runs Color if value is 0 00 8 50 000 00 if value is 50 000 00 100 000 00 Select Option and Output Variable Col if value is Option 1 Net Present Value NPV Line Item 100 000 00 608 388 29 Col if value is Original Value Revenues Sales Revenue Global Sales 6 021 645 11 Direct Costs Direct R amp D Direct Costs Manufacturing Direct Costs Fabrication Direct Costs Direct COGS Indirect Expenses Sales and Administrative Indirect Expenses Marketing and Advertising Indirect Expenses Operations Indirect Expenses Maintenance Indirect Expenses Foreign Transactions Indirect Expenses Channel Partners DCF Depreciation DCF Amortization DCF Interest DCF Change in Net Working Capital DCF Capital Expeditures 664 649 46 32 225 76 2 082 90 79 162 55 18 737 00 0 00 32 449 82 160 820 52 39 156 00 26 573 31 806 711 00 0 00 156 216 53 5 0 50 5 5 0 50 Ski 570 0 50 5 5 0 50 5 5 0 50 5 5 0 50 5 5 0 50 5 5 0 50 576 570 0 50 5 5 0 50 5 5 0 50 5 5 0 50 Ski 5 0 50 E Revenue vs Discount Rate Save As h Name You can create and save multiple Scenario Analyses by selecting the Option droplist checking up to two inputs modifying the ranges to test choosing color settings if required e
36. e your investment portfolio subject to budgetary and other constraints Sec 1 Discounted Cash Flow Model DCF 2 Cash Flow Ratios SES etail Project or Option Title Corporate Objective Proponent Group Reference Number Program Type Description All LH Primary Justification Funds Status Total Investment Cost Total Budget for the Year Total Budget for NPV i Categories You can enter in the project specific details as required and replicate this on other projects as required Categories can be customized and you can also link external files that may be relevant to this project using the Link File button When you are done with this Project note that you can continue to view other projects or proceed to the next step As information you can DUPLICATE ADD DELETE Project tabs as required without any limit ied JDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com ke N Valuation amp REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to DCF Portfolio Analysis and play with some of the checklists and droplists 3 EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL ea File Edit Projects Report Language Decimals Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks an
37. ecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Set Input Assumptions Simulation Results Overlay Results Analysis of Alternatives Dynamic Sensitivity The simulation run has been completed Select multiple Option and Output Variables to view the simulated probabilistic chart results side by side t m _ t Net Present Value NPV Me b k ZS GG AN JMJ ZS DO OCD SAN Khk RE Data Labels t Net Present Value NPV with Terminal Value S Curve Color Line Index e A At Custom Text Properties Internal Rate of Return IRR S ae as PDF Curve Overlay Project 1 Net Present Value NPV Return on Investment ROI 12 Project 2 Net Present Value NPV Payback Period PP Discounted Payback Period DPP Net Present Value NPV Net Present Value NPV with Terminal Value 10 Internal Rate of Return IRR Modified Internal Rate of Return MIRR Profitability Index PI 1 Return on Investment ROI 8 1 Payback Period PP 1 Discounted Payback Period DPP aa ee es II p kag Frequency on Percentiles Certainty Values 0 500
38. ect Economics Analysts Teal PEAT This tool wall help you set up a series of projects or capital investment options model ther cash flows simulate her risks and run advanced analytics perform Fees and prediction modeling and opGmine your investment Petrol subject to budgetary and other conatrants N f Project Doongmics Aregeg An ietpeg Rik Smuabon Opona Siriaas Options Valuation Forecast Prediction Fortioio Gotimization inyaledge Cenier Global Settings Custom Cakcodapeoeng Opbon 1 Large Capsoty 100 Option 2 Medum Capacity 60 Portfolio Analysis L Input Assumptons 3 Escalation and Deprecaton 3 Cash Flow Model 4 Economic Results 5 Information and Details Project or Option Hame Enter the required inputs for this current Optien You can enter additional Qeliers aa required to provide an lege of alternatives and io generate an neesiment porthole When dane proceed to Fre mest shep fo wen the eecaletenideprecation results cash flow model and erem results Large Capecty Dewsopment at 100 MMS CPD Pi ry 1300 7500 Description and Motes L ptsen CRA Ald Uption s Final Year of Cath Flow keet Opton ERC di Corporate Tax Rate Used in the Model 2016 Corpdspte Discount Aste Option Economic Lifespan Years Revenues 3 Rows Expenses 3 Boss d Beem Auto the Same Vase Expenses Auto the Same Values Copy e ee Ful Grad i H 3 d 4 V 7 8 217 2018 2020 2022 2023 35 000 10 ji mlz 2013 20
39. efit Cost ROI P 1 CF Cost You can also learn the basics of the project economics and financial analytics that PEAT uses through the knowledge center s basic project economics lessons Step back and forth as usual You can also create your own custom training materials for your staff and company s personnel for this subtab Dublin California admin realoptionsvaluation com 1 Real Options RASA eee UE N E A EAE D dIUaOLSS k Bx REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Knowledge Center Getting Started Videos and click on the video icon to start watching S C Users Dr Johnathan Mun Desktop crash rovprojecon ROW PROJECT ECONOMICS ANALYSIS TOOL as File Edit Options Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Basic Project Economics Lessons Getting Started Videos Step by Step Procedures PEAT Quick Getting Started Video File Edt Ophens Settings Report Help Welcome to the ROW Proj
40. el of the charts and re run the analysis based on your sensitivity settings etc C VU d UPUONS okery italien em PM el EINEN BUI OO ET Dublin California admin realoptionsvaluation com N Valuation WE REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Applied Analytics Scenario Analysis Scenario Input Settings Double click on a saved scenario model bottom right to view its settings or to make and save your own scenario model O Users Dr Johnathan Mun Desktop updated example rovprojecon RON PROJECT ECONOMICS ANALYSIS TOOL File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow V Static Tornado Scenario Analysis 1 Scenario Input Settings 2 Scenario Output Tables Sweetspots Scenario Analysis helps identify the sweetspots and hotspots in the results based on different inputs Select the Option and Output Variable you wish to analyze and from the list of input variables select up to TWO variables to change check the box and enter the From To Step Size Color a if value is 0 00 You can add color coding to identify potential sweetspots and hotspots an
41. elect the area 1 742 50 11 737 14 225 850 12 225 850 12 225 850 12 225 850 12 225 850 12 225 850 12 275 850 12 225 850 12 225 850 12 IT H H TI H es prere Revenue Global Sales 1 742 50 1 73714 s 1 225 850 12 225 225 850 12 225 225 850 12 225 225 850 12 225 225 850 12 Link To in Custom tab Direct Costs 1 141 09 1 141 09 27 888 82 27 888 82 27 888 82 27 888 82 27 888 82 and right click Direct R amp D 1 110 26 1 110 26 24 896 68 24 896 68 24 896 68 24 896 68 24 896 68 TE te Manufacturing isso 18 50 mopy CIRL C s289 82989 82389 s289 82989 Fabrication 1233 1233 a peas 51 25 EE aa sas Then select the Direct COGS oo 0 00 211100 2111 00 211100 2111 00 2111 00 ml 5 ropriate Gross Profit Operating Income 60141 10 596 05 Paste Absolute Values 197 961 30 197 961 30 197 961 30 197 961 30 197 961 30 pprop Indirect Expenses General amp Administrative 884 42 3 127 28 Paste With Signs Reversed 8 59 8 949 71 12 187 27 area In Sales and Administrative 50 00 50 00 Paste Into Range am am sooo soo 703 00 Marketing and Advertising 35 0 e 35 00 35 0 35 00 35 00 0 00 and right click Maintenance 799 42 Sects 4 758 48 E 4 758 48 JE 4 758 48 T 4 758 48 AF 4 758 48 SE 6 423 36 JE 5 113 58 T 511358 7 733 14 Link From Foreign Transactions 0 00 0 00 4 1 506 m 1 506 00 1 506 00 1 1 506 m 1 506 00 1
42. erate reports Trend Line Linear GC Use Rows 1 20 Trend Line Logarithmic Detrended Trend Line Logarithmic Trend Line Moving Average Detrended at ch STE Zei Zei To en H L CH 2D Te te E e A STE Save Optional You can save multiple analyses and notes in the profile for future retrieval Name Actual vs Forecast Notes RPV Comparison Chart arg IRR Line Chart Discount Payback Area Chart l Sample Sales Forecast Prediction Stock Price Volatility Modeling GARCH Missing Data Interpolation Cubic Spline Relationship Modeling Econometrics instructions to set up and save retrieve your forecast model Click on Options to open load some example data and models or to save your forecast model as its own profile or to recover an existing set of data models az NEAL UDUONS MAZITI CPEE A AEE a T E L HEET Dublin California admin realoptionsvaluation com N qiUdtit2 EK REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Portfolio Optimization Optimization Settings and double click on a saved model to run fm EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL Sa File Edit Projects Report Language Decimals Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling a
43. fitability Index PI Net Present Value NPV with Terminal Value Return on Investment ROT 410 854 81 1 Internal Rate of Return IRR Modified Internal Rate of Return MIRR Discounted Payback Period DPP 315 748 70 show NPV 8 to 300 Net Present Value Profile Copy Results Copy Chart 276 070 70 A EI EEEE ANM En am eoewhkr R e Hc HA 208 930 92 Net Present Value Profile 180 389 95 154 622 16 131 276 06 110 052 94 90 697 98 72 992 99 56 750 39 41 808 38 28 026 87 15 284 15 3 474 14 7 495 96 Met Present Yalue NPY 15 00 20 00 O Discount Rate You can compute the project economic and financial metrics using different cash flows by choosing the relevant droplist items You can also change the type of chart to display from the chart droplist as well as change the look and feel of the chart as required 1a UDUONS MAII RMP i are T A Male IO ET TE Dublin California admin realoptionsvaluation com D N ditd tioD g REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to DCF Project 1 Information and Details 5 EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL E File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimiz
44. folio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimizatiorh Dashboard Knowledge Center Use the following to create and save a list of preconfigured dashboards to represent the analyses main results Please note that this module will create LIVE dashboards which means that you will first have to run the relevant analyses e g run a simulation run an optimization run forecasts et cetera in order to obtain the results before you can dick on View Dashboards to view the results Step 1 Setup the quadrants Quadrant 1 Chart Discounted Cash Flow Portfolio Analysis Bubble Chart Quadrant 2 Chart Discounted Cash Flow Portfolio Analysis Chart Net Present Value NPV Quadrant 3 Chart Simulation Simulation Results Chart Option 1 Internal Rate of Return IRR Quadrant 4 Simulation Simulation Results Chart Option 1 Net Present Value NPV Step 2 Quadrant N text settings Step 3 Saved Dashboards Dashboard Title Charts Dashboard 1 Charts Dashboard 1 Simulation Results Comparison 1 Combination Dashboard 1 Step Ar View Saved Dashboards Ciiew Dashboards You can create and save multiple management dashboards here Each dashboard can have four quadrants with any combinations of charts results data grid forecast or optimization results or custom text Please be aware that you mus
45. g Wrap Text General 7 Bad Good Neutral Calculation IR J s GT EA Paste A FormatPainter B Z H D A ES ZE Susanne gt 9 Conditional Format Explanatory Linked Cell Note al ramit EE Sort Kad a Clipboard a Font a Align ment a Nu mber Styles DW Editin g RE X fe 10 A B CG D E F G H J K L M N O P Q R 1 4 Base Year 2014 Sum PV Net Benefits 4 762 09 Discount Type Discrete End of Year Discounting e 5 Start Year 2014 Sum PV Investments 1 634 22 6 Market Risk Adjusted Discount Rate 15 00 Net Present Value 3 127 87 Model 1 Include Terminal Valuation Le 7 Private Risk Discount Rate 5 00 Internal Rate of Return 55 68 8 Terminal Period Growth Rate 2 00 Return on Investment 191 40 9 Effective Tax Rate 40 00 Profitability Index 2 91 10 11 2021 12 Product A Avg Price Unit 13 Product B Avg Price Unit 14 Product C Avg Price Unit ay Z Excel Linkin 15 Product A Sale Quantity 000s g 2 16 Product B Sale Quantity 000s 11 Saved Links 17 Product C Sale Quantity 000s oll 4 18 Total Revenues 1 231 75 1 268 50 CAUsers Dr Johnathan Mun Desktop Excel Links rovprojecon ROV PROJECT ECONG Excel Source Fie 19 Direct Cost of Goods Sold 184 76 190 28 File Edit Projects Report Language Decimals Help Product Pricing 20 Gross Profit 1 046 99 1 078 23 Welcome to the ROV Project Economics Analysis Tool PEAT This tool wil
46. his tab Start by selecting the option type and enter your inputs click on Load Example to view a sample set of inputs as a guideline or click on several available droplists to link to the relevant project s values Save the options model for later retrieval You can also view a sample strategy tree of the selected option type and view the sensitivity tornado and scenario analysis of the selected option Se VU d UPUONS MAISE aar aT EAT TO ETA Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com NW Valuation Wi Go to Options Valuation run a model and go to the Sensitivity subtab CAUsers Dr Johnathan Mun Desktop updated example rovprojecon ROW PROJECT ECONOMICS ANALYSIS TOOL Late DER File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints e Gees i e fe z T Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Step 1 Select the option execution type 96 American 9 Bermudan European This tab allo
47. icking on any saved optimization model in the previous Optimization Settings tab will run the optimization model and automatically bring you to this results tab Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com r REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Portfolio Optimization Optimization Settings and click Compare Models then select the five Noneconomic Variables to run and compare 3 EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL Report Language Decimals Help Compare Model Settings your investment portfolio subject to budgetary and other constraints ect Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Optimization Budgets and Projects Optimization Efficient Frontier Budget Optimization Efficient Frontier Projects V Noneconomic Variables Satisfy Demand J Noneconomic Variables Business Strategy V Noneconomic Variables Value to Society V Noneconomic Variables Safety amp Security V Noneconomic Variables Management Goals Eranamic a
48. l help you set up a series o 21 Operating Expenses 157 50 157 50 modeling and optimize your investment portfolio subject to budgetary and other constraints 22 Sales General and Admin Costs 15 75 15 75 3 Link Excel 23 Operating Income EBITDA 873 74 904 98 Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuatic 24 Depreciation 10 00 10 00 Se begs WW s300 3 00 1 Geen Gips project 1 Project2 Project 3 Project 4 Protect 5 Proi C Users Dr Johnathan Mun Desktop Excel Source De Ae Use this custom calculations sheet to perform your own intermediate computations that will be sa 26 EBIT 860 74 891 98 TO then in the input worksheets select the relevant input cells right click and select LINK FRO Excel Sheet 27 Interest Payments 2 00 2 00 assumption sheet location The main functions supported by this custom calculation sheet indude Sheets 28 EBT 889 98 858 74 V Auto Update Links When This rovprojecon Op Information 20 Taxes 343 50 355 99 RiskSim 30 Net Income 515 24 533 99 A B c D E F Model 31 Noncash Depreciation Amortization 13 00 13 00 aE Geesen ga es Capital SS 10 0000 10 5000 11 0000 11 5000 12 0000 12 5000 13 0000 13 5000 BEE EES 0 00 0 00 12 2500 12 5000 12 7500 13 0000 13 2500 13 5000 13 7500 14 0000 34 Free Cash Flow 528 24 546 99 15 1500 15 3000 15 4500 15 6000 15 7500 15 9000 16 0500 16 2000 35 From C12 To 36 Inves
49. lation Trials ER Revenues Sales Revenue Global Sales 2024 an Apply Seed Value 123 Revenues Sales Revenue Global Sales 2025 stop Simulation Simulation E Revenues Sales Revenue Global Sales 2026 Step 4 Save Edit Simulation Models Optional Revenues Sales Revenue Global Sales 2027 TE All Simulations Model Revenues Sales Revenue Global Sales 2028 225 850 12 Revenues Sales Revenue Global Sales 2029 232 123 44 Revenues Sales Revenue Global Sales 2030 233 066 93 Revenues Sales Revenue Global Sales 2031 234 236 25 Revenues Sales Revenue Global Sales 2032 234 575 69 Revenues Sales Revenue Global Sales 2033 235 437 44 Revenues Sales Revenue Global Sales 2034 235 437 44 Model All Simulations Model roject 1 Simulation Kkkkkkk You can create and save your own risk simulation models by selecting the Option Project then checking the boxes of the input variables you wish to set assumptions on entering the distributional inputs and saving the model nedi UDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com N diUdtinD WE REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Risk Simulation Simulation Results Type in some sample Percentiles to obtain Confidence Levels or vice versa EXAMPLE ROV PROJECT ECONOMICS ANALYSIS TOOL File Edit Projects
50. mp Manacanamic ilainhted Canctrsinte mi Noneconomic Variables Weighted Average of Customs T Noneconomic Variables Multicriteria Constrained Optimization Optimization Results Advanced Custom Optimization The optimization run has been completed Optimize Time 1s ization parameters here Be aware that to have a good set of portfolio ypically multiple Options need to be available and to have been modeled and mW ts and Projects nt Frontier Budget nt Frontier Projects les Weighted Average of Customs les Satisfy Demand d amp Compare Model Results Index 1 2 Model Modell Model 2 Save As entra v 3 Model 3 Step 3 Set your Constraints tL LLL BStist Custom Constraints Efficient Frontier Optional Value Min Max delt D EE Weight Relation Step Size Number of Projects Total Investment Total Net Present Value Total Rate of Return Custom Variable 1 25 00 Custom Variable 2 25 00 Custom Variable 3 25 00 RES mm gf ke X Se BESSE Ce A ch Count Model 4 Model 5 Objective Function 556 593 556 3o 39 Optimized Constraint 1 7 7 7 7 7 Optimized Constraint 2 2 5889e 006 2 4131e 006 2 5889e 006 2 5853e 006 2 4131e 006 Option 1 Step 4 Select the D Decisioni Portfolio To KkKKKKKKKKKI Optio
51. n Option2 Option3 Option4 Option5 Option6 Option7 Option8 Option Option10 Option 2 Option 3 Option 4 Option 5 Option 6 Option 7 Option 8 Option 9 m All selected models will run and you can see the results sliced and diced in various points of view and the results will be returned as an optimized matrix of decisions Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com A arr Go to Portfolio Optimization Advanced Custom Optimization E C Users Dr Johnathan Mun Desktop updated example rovprojecon ROW PROJECT ECONOMICS ANALYSIS TOOL File Edit Options Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Optimization Settings Optimization Results Advanced Custom Optimization Optimization is used to allocate resources where the results provide Optimization Optimized Results
52. n at any Phase IV Invest 20M spin phase fhe projects development can be slowed down Contract or off new product accelerated Expand depending on the outcome of each phase 50 higher market share Another potential issue is synergy Even ifthe development of the Phase Ill 20 00 curent technology is unsuccessful the knowledge and insights Stop After Phase IV gained may be applicable to some other product Technology B Exit Phase Il 20 00 Stop After Phase IIl Contract Fhase 20 00 An NPV analysis cannot account for these options to Abandon Reduce R amp D spending by ENEE S20M and profits by 50 corrections over time when 30 00 uncertainty becomes SS resolved Abandon and sell off assets Spread out R amp D SES geg ma er The new technology will yield a potential 50 increase in investments over 4 5 00 projected revenues if implemented However Technology time Spend a little Do Nothing B can be applied only after the success of Phase Vs over time fo decide R amp D efforts if this new emerging technology is viable The firm can cut its losses and get out al any time You can select any example model from the File icon create your own strategy trees or run example create your own decision tree model The last saved strategy tree model that is viewed will be opened the next time the PEAT profile is opened assuming the corresponding strategy tree file has not changed its name or location You can also run the
53. nd optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Optimization Settings Optimization Results Advanced Custom Optimization The optimization run has been completed Set the portfolio optimization parameters here Be aware that to have a good set of portfolio Sten 3 Set Cor te Effient Frontier Optional optimization results typically multiple Options need to be available and to have been modeled and ae ae cu eee ae SES ficient Frontier Optional Weight Relation Value Step Size Number of Projects a HI Total Investment lt x 3500000 2000000 4000000 500000 Total Net Present Value HI Total Rate of Return HI Custom Variable 1 HI Custom Variable 2 HI lc ustom Variable 3 HI Custom Variable 4 HI Custom Variable 5 HI Custom Variable 6 HI Custom Variable 7 HI Custom Variable amp ce mmm Max Portfolio Return to Risk Inverse CV Use Previously Saved Results Step 4 Select the Decision variables to optimize C Load and Use Latest Results Decisions Custom 1 Custom 2 Custom 3 Custom 4 Custom 31 Custom 6 Custom 7 Custom 8 Weighted AVG E Portfolio Total 11 15 5 5 159 554 77 Option 22 04 250
54. ntering a name and Save As the scenario model when done proceed to the next step to view the results You can Edit a saved model as well 1 i d UDUONS MATIPA AEA a E A LEE T R Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com NX Valuation Br Go to Applied Analytics Scenario Analysis Scenario Output Tables Select a saved scenario model from the droplist to run CAUsers Dr Johnathan Mun Desktop updated example rovprojecon ROV PROJECT ECONOMICS ANALYSIS TOOL File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Dashboard Knowledge Center Static Tornado Scenario Analysis 1 Scenario Input Settings d 2 Scenario Output Tables Sweetspots Select one of the saved scenarios to run the scenario table In the event you make any changes in the inputs or settings remember to dick Update to manually update the scenario table Copy Grid View Full Grid Option 1 Net Present Value
55. odeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Risk Simulation Options Strategies Options Valuation Forecast Prediction Portfolio Optimization Knowledge Center ri vi Custom Calculations Project Project7 Projecti0 Portfolio Analysis Discount Rates 1 Discounted Cash Flow Model OCF 2 Cash Flow Ratios 4 Information and Details DCF Starting Year 2016 DCF Ending Year 2045 Discount Rate GC 10 00 Marginal Tax Rate CS Revenues 1 Rows Direct Costs Row Indirect Expenses Assume Constant Tax Rate se Year E 16 2017 2018 i 2019 2020 2021 F 2022 2023 2024 7025 1 742 50 11 737 14 225 850 12 225 850 12 225 850 12 225 850 12 275 850 12 225 850 12 275 850 12 225 850 Caen Revenue Global Sales 1 742 50 11 737 14 225 225 650 12 ER 225 690 12 225 225 650 12 225 225 650 12 ER 225 690 12 225 225 650 12 225 225 850 12 225 225 850 Direct Costs 1 141 09 1 241 09 26 392 75 26 392 75 26 392 75 26 456 81 27 866 82 27 888 62 27 888 82 27 888 Direct R amp D 1 110 26 1 110 26 24 896 58 24 896 68 24 896 68 24 896 68 24 896 68 24 896 68 24 896 68 24 896 Manufacturing 18 50 16 50 414 95 414 95 414 95 453 38 629 89 629 89 629 89 829 80 Fabrication 12 33 12 33 25 52 25 62 25 62 514 51 25 51 25 514 5125 Direct COGS 0 00 0 00 1 055 50 1 055 50 1 055 50 1 055 50 2
56. ortfolio Analysis Discount Rates 4 Discounted Cash Flow Model DCF Cash Flow Ratios 3 Economic Results 4 Information and Details Current Asset 32 806 00 Current Liabilities 18 370 00 Long Term Operating Assets 114 095 00 Total Inventories 676 61 Accounts Receivables 4016 00 Shares Outstanding 1 132 357 090 Stock Price Per Share 27 00 Common Equity 70 530 00 Total Assets 146 901 00 Total Debt 56 001 00 Total Net Operating Capital 126 531 00 Year 2016 2017 2018 2019 UE 20 2022 2023 EARNINGS BEFORE INT TAX DEP AMORT EBITDA 198 01 1 922 11 190 244 76 190 244 76 190 244 76 190 180 70 188 748 69 187 083 81 128 393 59 EARNINGS BEFORE INTEREST AND TAXES EBIT 198 01 2 331 23 150 417 76 151 170 76 152 083 76 152 974 70 152 576 69 151 860 81 153 915 59 NET INCOME NI 141 58 6 528 34 89 035 45 91 808 58 94 994 46 98 049 50 99 753 00 99 783 27 101 776 22 _NET OPERATING PROFIT AFTER TAXES NOPAT NET CASH FLOW NCF OPERATING CASH FLOW OCF FREE CASH FLOW FCF RETURN ON INVESTED CAPITAL ROIC 8510 ECONOMIC VALUE ADDED EVA 1 299 467 71 1 453 422 95 9 652 381 05 9 623 923 34 9 719 654 69 9 765 TIMES INTEREST EARNED TIE E 9 66 1 NET PROFIT MARGIN NPM 46 4 Balance Sheet Ratios CURRENT RATIO CR 1 79 BOOK VALUE PER SHARE BW 0 00 SS NET OPERATING WORKING CAPITAL NOWO NET OPERATING CAPITAL NOO MARKET VALUE ADDED MVA DEB
57. ow Time Series Analysis Auto 10 VARQ VARIO mue Series Analysis Double Exponential Smoothing NPY IRR MIRR ROI Payback Sales Stock Years Rates E Time Series Analysis Double Moving Average Lag 4 736934 0 350900 0 156700 2 947700 4 160800 684 20 459 11 0 083333 0 045500 Time Series Analysis Double Moving Average Fr 243132 0 276100 0 154800 4 603200 7 025000 584 10 460 71 0 250000 0 044700 Time Series Analysis Holt Winter s Additive 36805 0 194100 0 123700 0 669700 7 211800 765 40 460 34 0 500000 0 045200 Time Series Analysis Holt Winter s Multiplicative Data Seasonality Periods Cycle 31656 0 183400 0 123400 0 575600 8 128400 892 30 460 68 1 000000 0 043900 Time Series Analysis Seasonal Additive eee iene 69999 0 215600 0 126800 0 845400 6 218100 885 40 460 83 2 000000 0 041300 Time Series Analysis Seasonal Multiplicative Beta Optional 0 1 else optimized 19726 0 189100 0 115900 0 265900 5 232900 677 00 461 68 3 000000 0 041600 Time Series Analysis Single Exponential Smoothing Gamma Optional 0 1 else 279068 0 231300 0 124200 1 143300 6 200000 1006 6 461 66 5 000000 0 042600 Time Series Analysis Single Moving Average ee R ANNIA 0 72277300 NTA 1 ASS A FSAI 11771 ARAA 2 NOON Anann Trend Line Difference Detrended o 4 7 ell a Trend Line Exponential Detrended gt A STEP 3 Run Ges Sieg EE dE or ep Trend Line Exponential S and charts to dipboard or gen
58. pute the weighted average cost of capital WACC and CAPM Beta estimates here Load example data to get started or enter your assumptions to compute WACC You can also paste stock prices and stock returns to compute a market based Beta coefficient Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com PO UDUONS Copyright 2005 2013 Dr Johnathan Mun All rights reserved N Valuation SE Go to Applied Analytics Static Tornado and play with some of the checklists CAUsers Dr Johnathan Mun Desktop updated example rovprojecon ROV PROJECT ECONOMICS ANALYSIS TOOL File Edit Projects Report Help Welcome to the ROV Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment portfolio subject to budgetary and other constraints Discounted Cash Flow Applied Analytics Static Tornado Scenario Analysis Tornado or static sensitivity analysis is performed by perturbing the inputs a preset amount one at a time to determine the impact on the output variable Start by selecting the Option and Output Variable to test then set the sensitivity levels and dick Compute to run ra a iret Ek GB JN Jk E ILL OO mee WR e Option 1 Net Present Value NPV Select the Option and
59. raint Optimization Simple Profit Maximization Two Sided Constraint Similar to dynamic optimization but the process is repeated multiple times The final Optimization Stochastic Portfolio Optimization Sharpe Ratio decision variables will each have their own forecast chart indicating its optimal range Number of Simulation Trials Number of Optimization Runs Load Example Variables Management You can create save and run your own optimization models in this tab or run some previously saved example models You have to first set up the model s Decision Variables using the Variables Management tool then set the Objective and Constraints You can set variable constraints with a range to run an investment efficient frontier analysis h2 i d UDUONS MAII PEE A AEA a Mun All rights reserved Dublin California admin realoptionsvaluation com N didticnD En REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to Dashboard to review the settings and click View Dashboards when done 5 CAUsers Dr Johnathan Mun Desktop updated example rovprojecon ROV PROJECT ECONOMICS ANALYSIS TOOL File Edit Options Report Help Welcome to the ROW Project Economics Analysis Tool PEAT This tool will help you set up a series of projects or capital investment options model their cash flows simulate their risks and run advanced analytics perform forecasting and prediction modeling and optimize your investment port
60. t click and select LI TO then in the input worksheets select the relevant input cells right click and select LINK FROM and choose the relevant inputs to use Alternatively select the cells you wish right click COPY and paste the contents into the relevant ir assumption sheet location The main functions supported by this custom calculation sheet include ABS LN LOG POWER SUM AVERAGE MIN MAX IL ms 50 0000 EE 2 EEN E E E GE FE Ge E EE E SEH E GER ee eee ee eee ea ee ee 10 0000 10 5000 11 0000 11 5000 12 0000 12 5000 13 0000 13 5000 14 0000 14 5000 12 2500 12 5000 12 7500 13 0000 13 2500 13 5000 13 7500 14 0000 14 2500 14 5000 15 1500 15 3000 15 4500 15 6000 15 7500 15 9000 16 0500 16 2000 16 3500 16 5000 x 20 0000 20 0000 20 0000 20 0000 20 0000 20 0000 a HnkFrom Copy CTRL C Cut CTRL X Paste CTRL V Paste Absolute Values Paste With Signs Reversed Custom Calculations Project 1 Project 2 Project 6 ject 10 Portfolio Analysis Discount Rates 1 Discounted Cash Flow Model DCF 2 Cash Flow Ratios DCF Starting Year 2016 DCF Ending Year 2043 Discount Rate 1000 Marginal Tax steig 28 50 Revenues Rows Direct Costs 4 Rows Indirect Expenses 6 Rows Copycrid View Full Grid Manually Enter Custom Taxes e Manually Enter CustomTaxes Enter Custom Taxes ef 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Ja S
61. t first run at least one RISK SIMULATION OPTIMIZATION and FORECAST model each before the dashboard will show any data results If you do not run anything there will be no results to show o VU d UPUONS te EdEBZOEeTd fTOEIEI BRUET Dublin California admin realoptionsvaluation com N ditd ticn Wi REAL OPTIONS VALUATION Inc www realoptionsvaluation com In the View Dashboards mode select any one of the saved dashboards from the droplist View Dashboards r Capture Screen Mtb eee NM Jk E Dam Gs Ree Alle i RL ELSE Z NM Jk E Dam amp m SE Jg si Intemal Rate of Retum RR Investment Portfolio View 200 000 400 000 600 000 800 000 1 000 000 200 000 Net Present Value NPV with Terminal Value et ELSA E IL am Gesi kg ve Frequency 10 00 Project 1 Internal Rate of Return IRR Net Present Value NPV E Options Projects Met e e p T Tdd lA tobe Oo ER B Frequency 9 00 6 00 T 00 6 00 5 00 4 00 3 00 2 00 1 00 0 00 16 418 30 Project 1 Net Present Value NPV 436 101 16 555 704 06 675 466 94 795 149 82 You can retrieve any of the saved dashboards and these dashboards will be populated only if the appropriate models have been run Pal UDUONS MAATA EA oiler turin A Mare lal OTT aluat OF Ze 29 Dublin California admin realoptionsvaluation com REAL OPTIONS VALUATION Inc www realoptionsvaluation com
62. tment Outlay 500 00 _ i EE Betis 1 105 97 546 99 TE 39 e is Sample A1 40 Financial Analysis 20 0000 20 0000 20 0000 20 0000 20 0000 20 0000 20 0000 20 0000 are 41 Present Value of Free Cash Flow 528 24 475 64 i aait 42 Present Value of Investment Outlay 500 00 0 00 43 Discounted Payback Period 3 47 Years 4 4 gt Information Model 3 3 e Ready 7 Se Custom Calculations tab s Excel Buon allows you to add edit delete Live Links from Excel to this tab You can add multiple links from multiple workbooks and worksheets into this single tab Reopening the file will auto update the data if you check the Auto Update option From Custom Worksheet you can now link to other tabs within PEAT e 2 J JUL Copyright 2005 2013 Dr Johnathan Mun All rights reserved Dublin California admin realoptionsvaluation com ue dlima Ee REAL OPTIONS VALUATION Inc www realoptionsvaluation com Go to DCF Custom Calculations enable links from to other tabs in PEAT Custom Calculations Project 1 Project 2 Project 3 Project 4 Project 5 Project 6 Project 7 Project 8 Project 9 Project 10 Portfolio Analysis Discount Rates Use this custom calculations sheet to perform your own intermediate computations that will be saved with the current file that can also be linked to the input sheets simply select the cells you wish to create a live link righ
63. utral Calculation All Saved Models Clipboard Font Alignment Number Styles A B c D E F G n E 1 Option 1 Net Present Value NPV Base Value 608 388 29 Input Changes Option 1 Net Present Value NPV 2 Inputs Output Downside Output Upside Effective Range Input Downside InputUpside Base Case Value 3 Revenues 471 501 67 745 274 91 273 773 24 5 419 480 60 6 623 809 62 6 021 645 11 Revenues 5 419 480 60 E 6 e ee 4 DCF Discount Rate 694 674 44 533 487 06 161 187 38 9 00 11 00 10 00 DCF Discount Rate 11 00 EEN 5 DCF Marginal Tax Rate 642 603 76 574 172 81 68 430 95 25 65 31 35 28 50 e 24 25 25 66 6 DCF CAPITALINVESTMENTS 633 388 29 583 388 29 50 000 00 225 000 00 275 000 00 250 000 00 EP Eee tae Fe 2 31 35 M 25 65 7 DCF Depreciation 629 216 89 587 559 68 41 657 22 726 039 90 887 382 10 806 711 00 DCF CAPITAL INVESTMENTS 275 000 00 J 225 000 00 3 Direct Costs 625 471 55 591 305 02 34 166 54 700 308 60 855 932 74 778 120 67 POSi 387 382 10 WR 726 039 90 9 DCF Interest 615 236 53 601 540 04 13 696 49 140 594 88 171 838 18 156 216 53 10 Indirect Expenses 614 675 96 602 100 61 12 575 34 249 962 98 305 510 31 277 736 65 Direct Costs 855 932 74 700 308 60 11 DCF Change in Net Working Capital 608 388 29 608 388 29 0 0 0 0 DCF Interest 171 838 18 MJ 140 594 88 12 CFR Accounts Receivables 608 388 29 608 388 29 0 3 614 40 4 417 60 4 016 00 13 indirect Expenses 305 510 32 W 249 962 99 14 DCF
64. ws you to model and value the most common real ane strategies For more complex real options models e g inputs over time simulated inputs complex customized options nested options et cetera please use the Real Step 2 Select the type of real options to model and value e EE pi re sa Pl See SLS software instead Single Phased and Single Asset Options Option to Abandon e 7 Multiple Phased Sequential Options Compute Result 125 4582 Step 4 Compute the strategic real options value 2 Phased Option Proof of Concept R amp D Load Example Sensitivity 10 Ys Manual Input Show the top variables Step 3 Enter the real options input assumptions Basic Option Assumptions Asset Value Present Value of Net Benefits 120 00 Update Copy Grid Show results with 2 decimals 25 00 Manual Input EE American Option to Abandon Maturity Total Years to Option Expiration Risk Free Rate Riskless Discount Rate Dt Dividend Rate Opportunity Cost St Lattice Steps Typically 100 to 1000 Additional Single Phased Option Assumptions Salvage 5 00 5300 0 00 100 fm Value 125 46 Changes Output Output Effective Input Input Base Case Inputs Downside Upside Range Downside Upside Value Asset Value Present Value of Net Benefits 115 45 136 08 00 132 00 Volatility Annualized Risk Risk Free Rate Riskless Discount Rate Maturity Total

PEAT VISUAL GUIDE - Real Options Valuation, Inc.

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