|
Year | Outflow | Benefit After Tax | Tax saving on Depreciation | Sale Value After Tax | Total Benefit | PVF @ 12% | Present Value |
0 | -400000 | - | - | 0 | -4,00,000 | 1.00 | -4,00,000.00 |
1 | 113750 | 46,667 | 0 | 1,60,417 | 0.89 | 1,43,229.17 | |
2 | 113750 | 46,667 | 0 | 1,60,417 | 0.80 | 1,27,883.18 | |
3 | 113750 | 46,667 | 65000 | 2,25,417 | 0.71 | 1,60,447.13 | |
NPV | 31,559.48 | ||||||
Ans : E i,e project should be implemented since the NPV is positive. ( $ 31,559.48)
show work 18. Thornley Machines is considering a 3-year project with an initial cost of $400,000....
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