Calculating Npv

In: Business and Management

Submitted By heman9
Words 578
Pages 3
Fact File: Intial Investment Cost Price Each car Selling price each Car Cars sold per year Depreciation for each year Salary for sales people Iteam/ Year Investing Activities Initial Investment Tax Credit Tax Credit on salvage value Salvage Value Working Capital Cash Flow from IA Operating Activites Revenue Cost of Sales Grossprofit Salary Commission for Employee Earning before intrest an tax Corporate Tax @ 40% Net Profit Total Cash Flow Present Value Net Present Value

2,00,000 26,000 30,000 50 40,000.00 30,000 Year 0 -2,00,000 Year 1 0 16000

Coporate tax rate Return on Investment Capital tax gain

40% 12% 20%

Year 2 0 16000

Year 3 0 16000

Year 4 0 16000

Year 5 0 16000 -10000 50,000 520000 576000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000 6,33,000 359181.1997

-520000 -7,20,000

16000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000

16000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000 73,000

16000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000 73,000 51959.95809

16000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000 73,000 46392.81972

-7,20,000 -7,20,000 -1,39,092

73,000

65178.57143 58195.15306

Internal Rate of Return NPV @ 5% NPV Year 0 -7,20,000 34,826 Taking IRR at 5% and 12% IRR Traditional Formula = LR + { NPV @ LR/NPV @ LR - NPV @ HR} X (HR-LR) IRR 0.064017186 6.401718635 Year 1 Year 2 69523.80952 66213.15193 Year 3 63060.14469 Year 4 60057.28066 Year 5 495972.0634

Therefore Internal Rate of Return for this Project is 6.69600

A)

Payback Period Year 0 1 2 3 4 5 Future Cash Flows -7,20,000 73,000 73,000 73,000 73,000 6,33,000 PV of FCF Accumulated NPV on FCF

65178.57143 58195.15306 51959.95809 46392.81972 359181.1997

-6,54,821 -5,96,626 -5,44,666 -4,98,273 -1,39,092

Pay back Period Cannot be…...

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