Year 0

Investment Outlay
Fixed Capital -₦100,000,000.00
Working Capital -₦10,000,000.00
Total Outflow -₦110,000,000.00

Salvage Value ₦5,000,000.00

Project Life 4 Years
Annual Depreciation -₦26,250,000.00
Annual After-Tax Cash Flows Cost of Capital 8%

Year 1 2
Sales ₦120,000,000.00 ₦160,000,000.00
Cash Operating Expenses -₦84,000,000.00 -₦112,000,000.00
Depreciation -₦26,250,000.00 -₦26,250,000.00
Operating Income before Taxes ₦9,750,000.00 ₦21,750,000.00
Taxes on Operating Income -₦2,925,000.00 -₦6,525,000.00
Operating Income After taxes ₦6,825,000.00 ₦15,225,000.00
Add Back Depreciation ₦26,250,000.00 ₦26,250,000.00
After-Tax Cash Flows ₦33,075,000.00 ₦41,475,000.00

Terminal value After-tax non-operating Cash flows

Year 4
Salvage Value ₦5,000,000.00
Return Of Working Capital ₦10,000,000.00
Non Operating Cash flows ₦15,000,000.00

Present Value & IRR

0 1
Capital Outlay -₦100,000,000.00
Working Capital -₦10,000,000.00
After-Tax Operating Cash Flows ₦33,075,000.00
Sales Proceeds
Net Cash Flow -₦110,000,000.00 ₦33,075,000.00

NPV ₦16,479,096.46
IRR 14%
 3 4
₦140,000,000.00 ₦90,000,000.00
-₦98,000,000.00 -₦63,000,000.00
-₦26,250,000.00 -₦26,250,000.00
₦15,750,000.00 ₦750,000.00
-₦4,725,000.00 -₦225,000.00
₦11,025,000.00 ₦525,000.00
₦26,250,000.00 ₦26,250,000.00
₦37,275,000.00 ₦26,775,000.00

2 3 4

₦10,000,000.00
₦41,475,000.00 ₦37,275,000.00 ₦26,775,000.00
₦5,000,000.00
₦41,475,000.00 ₦37,275,000.00 ₦41,775,000.00
Annual After-Tax Cash Flows Cost of Capital 8%

Year 1 2
Sales 120.00 160.00
Cash Operating Expenses -84.00 -112.00
Depreciation -26.25 -26.25
Operating Income before Taxes 9.75 21.75
Taxes on Operating Income -2.925 -6.525
Operating Income After taxes 6.825 15.225
Add Back Depreciation 26.25 26.25
After-Tax Cash Flows 33.08 41.48

Terminal value After-tax non-operating Cash flows

Year 4
Salvage Value ₦5.00
Return Of Working Capital ₦10.00
Non Operating Cash flows ₦15.00

Present Value & IRR

0 1
Capital Outlay -₦100.00
Working Capital -₦10.00
After-Tax Operating Cash Flows ₦33.08
Sales Proceeds
Net Cash Flow -₦110.00 ₦33.08

Discounted Cash flows -₦110.00 ₦30.63

NPV ₦16.48
IRR 14%
 3 4
140.00 90.00
-98.00 -63.00
-26.25 -26.25
15.75 0.75
-4.725 -0.225
11.025 0.525
26.25 26.25
37.28 26.78

2 3 4

₦10.00
₦41.48 ₦37.28 ₦26.78
₦5.00
₦41.48 ₦37.28 ₦41.78

₦35.56 ₦29.59 ₦30.71