BUS 5111 Unit 3 Excel Calculations (100% correct)

Useful Life 5 years Tax rate 30%


Year 0 1 2
Equipments purchase $ (70,000)
Annual after-tax net cash flow $ 13,300 $ 13,300
Annual Depreciation tax savings $ 4,200 $ 4,200
Total Cash in (out) $ (70,000) $ 17,500 $ 17,500
PV factor (r=6%) 0.9434 0.8900
Present Value $ 16,509 $ 15,575
NPV $ (70,000)




Year 0 1 2
Annual Cash revenue $ 30,000 $ 30,000
Annual Cash Outflow $ 11,000 $ 11,000
Annual Net Cash flow $ - $ 19,000 $ 19,000