Genesis Energy WACC

Item

Amount ($000)

Accounts Payable
Short-term Note Payable
Total Current Liabilities

300,000
100,000
400,000

Long-term Note Payable

Mortgage Payable
Total Liabilites

400,000
1,200,000
1,600,000

Common Stock Equity

Operating Equity
Total Liabilities and Equity

1,500,000
500,000
4,000,000

Genesis Energy Captial Projects

Initial Investment
Project A: 25-emp facility
Project B: 40-emp facility
Project C: 75-emp facility
Facility
PV of the cash flows

-2000
-2500
-3000
-7500
-7500

Equipment 1 - fully automatic

Equipment 1 - semi-automatic
Equipment 1 - manual
Equipment 1
PV of the cash flows

-1500
-1000
-750
-3250
-3250

Equipment 2 - Standard
Equipment 2 - top of line
Equipment 2
PV of the cash flows

-800
-1500
-2300
-2300

Equipment 3 - 3-man machine

Equipment 3 - 2-man machine
Equipment 3 - 5-man machine
Equipment 3
PV of the cash flows

-700
-600
-750
-2050
-2050

In-house inspection

-1800

Contract inspection
Inspection
PV of the cash flows

-1800
-1800

Present value calculation for the year of 6-10

Facility
Equipment 1
($4,231.53)
($3,385.23)
($6,347.30)
($2,538.92)
($8,463.06)
($3,173.65)
($19,041.89)
($38,083.78)

$9,097.79

Table for the calculation of discounted payback period

Year
Facility
1
$665.08
2
812.4531005806
3
343.0786384083
4
977.8963565081
5
1161.3970979906
6
$6,404.83
Discounted Payback period
5.55

Calculation of IRR
Year

Facility
0
1
2
3
4
5
6
7
8
9
10

-7500
-700
-900
-400
1200
1500
4500
4500
4500
4500
4500

IRR

15%

Table for the calculation of ROI (without considering the discounting rate)
Particular
Facility
Initial investment
7500
Total return
23200
ROI
3.0933333333

Assumptions:
1). It has been assumed that the cost of debt is 5% and the cost of equity is 7%.

Genesis Energy WACC

%
Interest
Total
Rate

Weighted
Rate

7.50%
2.50%

11.11%
33.33%

5%
5%

1%
2%

41.67%
13.89%
100.00%

7%
7%

2.71%
0.90%
5.83%

Cash Flow
Y1

Cash Flow
Y2

Cash Flow
Y3

Cash flow
Y4

-200
-200
-300
-700
$661.42

-300
-200
-400
-900
$803.52

-400
100
-100
-400
$337.44

200
400
600
1200
$956.51

-100
-50
150
0
$0.00

100
-100
150
150
$133.92

200
200
150
550
$463.98

400
200
150
750
$597.82

-175
-100
-275
($259.84)

200
275
475
$424.08

250
325
575
$485.07

250
325
575
$458.33

-200
-175
-300
-675
($637.80)

-150
-100
-200
-450
($401.76)

250
175
300
725
$611.60

300
175
400
875
$697.46

100

500

500

300

200
300
$283.46

200
700
$661.42

100
400
$377.95

Cumulative cash flow

Equipment 1
Cumulative cash flow
$665.08
$0.00
$0.00
$1,477.54
$135.41
$135.41
$1,820.61
$471.73
$607.14
$2,798.51
$611.19
$1,218.33
$3,959.91
$503.27
$1,721.60
$10,364.74
$3,060.09
$4,781.69
5.50

Equipment 2
-261.28266033
428.794691973
493.175542712
468.575337493
483.915457496
$3,131.25
5.22

Equipment 1

Inspection
-1800
300
700
700
400
400
800
800
800
800
800

Equipment 2

200
700
$624.96

Inspection
($2,962.07)
($3,385.23)
($6,347.30)

$9,309.37

-3250
0
150
550
750
650
2150
2150
2150
2150
2150

$3,385.23

Equipment 2
Equipment 3
-2300
-275
475
575
575
625
2200
2200
2200
2200
2200

-2050
-675
-450
725
875
925

22%

Equipment 1

equity is 7%.

29%

-6%

29%

Equipment 2
Equipment 3
Inspection
3250
2300
2050
1800
$12,850.00
12975
1400
6500
3.9538461538
5.6413043478
0.6829268293 3.6111111111

Cash Flow
Y5

Cashflow
Y6-10

NPV

400
400
700
1500
$1,129.74

1000
1500
2000
4500
($38,083.78)

($41,695.15)

200
300
150
650
$489.55

800
600
750
2150
$9,097.79

7533.064634616

300
325
625
$470.73

700
1500
2200
$9,309.37

8587.7284347691

350
175
400
925
$696.67
300

-1083.8199489883
800

100
400
$377.95

800
$3,385.23

3910.9739305725

Cumulative cash flow

Equipment 3
Cumulative cash flow
-261.2826603325 -641.3301662708
-641.3301662708
167.5120316405 -406.2265502903
-1047.5567165611
660.6875743524
621.830032115
-425.7266844461
1129.2629118459
713.0494266205
287.3227421744
1613.178369342
716.1948770942
1003.5176192686
4744.4289737168
0

Inspection
285.04
631.91
665.08
380.05
380.05
569.32
3.57

Cumulative cash flow

285.035629
916.943597
1582.02673
1962.07424
2342.12174
2911.44004