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Stage 8 (2021) “Depreciation Modeling”

Professional Excel Templates for your Business

Stage 8 (2021) "Depreciation Modeling"

This is an actual case from the Financial Modeling World Cup 2021, Stage 8 (August 20-23) competition. This case deals with depreciation modeling. It covers different methods of depreciation and most of the questions here are independent.

Case description:

The objective of this case is to help Heavy Industries Company (HIC) create a 25-year annual financial model to forecast their depreciation expenses for tax and accounting purposes in their new subsidiary in Deprecilandia. The model must focus on CAPEX and Depreciation forecasting and be flexible enough to allow sudden changes in accounting methods if Deprecilandia’s accounting policies change after the elections.

HIC operates several chemical plants across the world and is about to launch its operations in Deprecilandia, a country known for its weird accounting rules. The different types of assets are depreciated through different depreciation rules for accounting purposes. However, for tax purposes, the depreciation is always done using a 5-year double-declining balance for all asset groups. HIC wants to forecast its depreciation expenses for the next 25 years to plan for its operations in Deprecilandia.

The downloadable file consists of the following:
Task: PDF file with Case Materials; PDF file with Questions; Excel file with Case Assumptions
Solution: Excel file with full Solution Model; PDF file with correct Answers in Bold

This model awarded 450 regular points + 120 Extra Points for the bonus questions, while the whole 2h Stage allowed to earn 1,150 points in total.

For your questions/suggestions/consideration please reach out to the Organizing Committee of the Financial Modeling World Cup at info@fmworldcup.com
You can also buy tickets to participate in the future FMWC Stages at https://fmworldcup.com/shop/

 

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