Year Discount Factor, 1 Amount Present Value

Net cash flows 1 0.86957 50,000.00 43,478.50

2 0.75614 50,000.00 37,807.00
3 0.65752 50,000.00 32,876.00
4 0.57175 50,000.00 28,587.50
5 0.49718 50,000.00 24,859.00
6 0.43233 50,000.00 21,616.50

b. Net Present Value

PV at 15 %
Discount factor for 6 periods 3.78448
PV of Net annual cash flows
(50,000 x 3.78448) 189,224
Capital Investment 180,000
Net Present Value 9,224