ect Net Cash Flows $ (260,000) $ 292,000 $ 218,400 $ 229,320 $ 270,536 A C D E F G . $ Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay EBIT = Sales - Costs - D tala At A (200,000) (35,000) (5,000) (240,000) (20.000) (260,000) negative 7 Operations: 3 Sales 9 Operating Cost 0 Depreciation 21 EBIT 2 Taxes 43 Net Income 210,000 $ 220,500 $ 231,525 126,000 $ 132,300 $ 138,915 Alla AIA A A 200,000 $ 120,000 $ 240.000 80,000 $ 28,000 $ 52,000 $ 336,000 $ 352,800 $ 370,440 117,600 $ 123,480 $ 129.654 218,400 $ 229,320 $ 240,786 45 Add back Depreciation $ 240,000 $ $ 46 47 Total Operating Cash Flow 292,000 $ 218,400 $ 229,320 $ 240,786 48 49 Terminal values: 50 1) Change in net WC 51 2) Salvage value (after tax) 52 Total 53 Project Net Cash Flows $ $ $ 20,000 9.750 29,750 54 $ (260,000 $ 292,000 $ 218,400 $ 229,320 $ 270,536 L M N P Q Allea ta 20,000 9.750 29,750 Salvage value*(1 - marginal tax rate) $ 229,320 $ 270,536 Paybacks 0.00 Payback Period ayback = 0.00 Year Count 0 1 2 Projected CF Cummulative CF (260,000) $ (260,000) 292,000 $ 32,000 218,400 $ 250,400 229,320 $ 479,720 $ 270,536 $ 750,256 Payback period A A A A A 3 4 0.00 years Discounted Payback Period Present Value Year Count 0 1 2 3 Projected CF Discount factor $ (260,000) 1 292,000 218,400 $ 229,320 $ 270,536 Discounted CF ($260,000) $0 $0 $0 $0 Cummulative CF $ (260,000) $ (260,000) $ (260,000) (260,000) (260,000) 4 5 4