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Capital Outlay 240,000 Salvage Value 25,000

Working Capital Outlay 20,000 BV -


Total 260,000 Profit before tax 25,000
No. of cans 100,000 Tax @40% (10,000)
Sales Price 2.0 Net inflow 15,000
Vcpu (60% of sales) 1.2
Contri pu 0.8

Depreciation rates 33% 45% 15% 7%

Particulars 1 2 3 4
Contribution 80,000 80,000 80,000 80,000
Depreciation (79,200) (108,000) (36,000) (16,800)
Opportunity cost: lease (25,000) (25,000) (25,000) (25,000)
Cannibalisation: orange biz (10,000) (10,000) (10,000) (10,000)
PBT (34,200) (63,000) 9,000 28,200
Tax @40% 13,680 25,200 (3,600) (11,280)
PAT (20,520) (37,800) 5,400 16,920
Add back: Depreciation 79,200 108,000 36,000 16,800
Net Salvage Value - - - 15,000
Working Capital recovery - - - 20,000
CF 58,680 70,200 41,400 68,720
PV @10% 189,403
Initial Outlay (260,000)
NPV (70,597)