Solution
Cash outlay = purchase cost + installation cost
=10,430,000 + 70,093
= 10,500,093
Depreciation = 10,500,093 / 5
= 2,100,018.6
Cash flow : revenue 4,280,000
(-) Cost. 1,500,000
EBITDA. 2,780,000
(-)Depreciation. 2,100,018.6
EBT. 679,981.4
(-) Tax 237,993.49
Net income 441,987.91
(+) Depreciation. 2,100,018.6
Cash flow = 2,542,006.51
Using financial calculator to calculate Npv
Inputs :. C0 =10,500,093
C1 = 2,542,006.51. Frequency = 5
I = 13%
Npv = compute
We get, Npv = ( -1,559,268.24)
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