In: Finance
NPV | $6,032.14 |
IRR | 13.86% |
MIRR | 13.26% |
Payback | 2.41 |
The Operating cash flows are
OCF | MACRS 3 year | |||||
Year | Cash flows | Depreciation | EBIT | Tax | PAT | OCF |
1 | 70000 | -58740 | 11260 | -4504 | 6756 | 65496 |
2 | 70000 | -80100 | -10100 | 4040 | -6060 | 74040 |
3 | 70000 | -26700 | 43300 | -17320 | 25980 | 52680 |
Salvage | |
Purchase price | 178000 |
Less: Depreciation | -165540 |
Closing book value | 12460 |
Selling price | 59000 |
Gain/(loss) | 46540 |
Tax/ Saving | -18616 |
Net salvage | 40384 |
Hence the Cash flows are:
Year | Initial cash flow | OCF | Working capital | Salvage | Net cash flows |
0 | -178000 | 1000 | -177000 | ||
1 | $65,496.00 | 65496 | |||
2 | $74,040.00 | 74040 | |||
3 | $52,680.00 | -1000 | 40384 | 92064 | |
WORKINGS