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  • Practice Problems 01: NPV Calculation for 5 Years

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    ইয়াসিন খন্দকার রাতুল
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    This document contains financial information for a 5 year project, including initial costs of $460,000, annual operating expenses of $83,000, sales of $265,000, and a tax rate of 40%. It calculates the annual after-tax operating cash flow, discounted cash flows for each year, and net present value of $97,449.11, indicating the project is financially viable.

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    Expansion project

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    This document contains financial information for a 5 year project, including initial costs of $460,000, annual operating expenses of $83,000, sales of $265,000, and a tax rate of 40%. It calculates the annual after-tax operating cash flow, discounted cash flows for each year, and net present value of $97,449.11, indicating the project is financially viable.

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    © All Rights Reserved
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    10 views1 page

    Practice Problems 01: NPV Calculation for 5 Years

    Uploaded by

    ইয়াসিন খন্দকার রাতুল
    This document contains financial information for a 5 year project, including initial costs of $460,000, annual operating expenses of $83,000, sales of $265,000, and a tax rate of 40%. It calculates the annual after-tax operating cash flow, discounted cash flows for each year, and net present value of $97,449.11, indicating the project is financially viable.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Practice Problems 01

    Cost 350000
    Installation 110000
    Total 460000
    N (years) 5
    Discount rate 10%
    SL. Depreciation 92000
    Operating expense 83000
    Sales 265000
    Recovery NWC 73000
    Tax rate 40%
    Salvage value 85000
    Bt (Book value of fixed capital) 0
    Initial Outlay 533000
    Annual after tax OCF
    (S-C)(1-Tc)+TcD 146000

    Terminal year after tax non OCF


    Salv.+Recovery of WC-(Salv.-Bt)*T 124000

    Years 0 1 2 3 4 5
    Initial Outlay -533000
    CF 146000 146000 146000 146000 270000
    Discount factor 0.909091 0.826446 0.751315 0.683013 0.620921
    Discounted CF -533000 132727.3 120661.2 109692 99719.96 167648.8
    NPV 97449.11

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