PV of annuity for making pthly payment | ||
P = PMT x (((1-(1 + r) ^- n)) / i) | ||
Where: | ||
P = the present value of an annuity stream | ||
PMT = the dollar amount of each annuity payment | ||
r = the effective interest rate (also known as the discount rate) | ||
i=nominal Interest rate | ||
n = the number of periods in which payments will be made | ||
PV of annual after tax cash outflow | PV of Annual cost + PV of cost | |
PV of annual cost | = 40000* (((1-(1 + 16%) ^- 13)) / 16%) | |
213,693 | ||
PV of annual after tax cash outflow | =213693+190000 | 403,693 |
PV of Salvage value | =19000/(1+16%)^13 | 2,759 |
So PV of inflow should be = | 403693-2759 | 400,934 |
PV of annual inflow | = Annual inflow* (((1-(1 + 16%) ^- 13)) / 16%) | |
400,934 | = Annual inflow* 5.34233 | |
Annual Inflow= | =400934/5.34233 | |
Annual Inflow= | 75,049 |
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