Year 1 Year 2 Year 3 Year 4

Savings in operating Costs 68800000.00 68800000.00 68800000.00 68800000.00

Less: Incremental Depreciation 30000000.00 30000000.00 30000000.00 30000000.00
Net Savings before Tax 38800000.00 38800000.00 38800000.00 38800000.00
Tax @ 39% 15132000.00 15132000.00 15132000.00 15132000.00
Net Saving after Tax 23668000.00 23668000.00 23668000.00 23668000.00
Cash Inflows (Net savings after tax + Incremental
Depreciation) 53668000.00 53668000.00 53668000.00 53668000.00
Recovery of Additional Working Capital 268000.00
Total Cash Inflows 53668000.00 53668000.00 53668000.00 53936000.00
Discounting Factor @ 11% 0.90 0.81 0.73 0.66
Present Value of Cash Inflows 48349549.55 43558152.75 39241579.05 35529313.82
Total Present Value of Cash Inflows 166678595.17
Less: Initial Cash Outflows 135268000.00
Net Present Value after Purchasing New Machine 31410595.17