this is the correct formula

Solution Assistance Used Simple payback period (before tax) = Net initial investment : Annual expected cash flows Simple payback period (before tax) = $27,222 : $7,800 = 3.490 years Simple payback period (after-tax) = Net initial investment : Annual after-tax expected cash flows Calculate annual after-tax cash flows: Net operating cash flows $7,800 x (1 - 0.3) = $5,460.00 Depreciation tax shield ($27,222 : 7) x 0.3 = 1,166.66 Net after-tax cash flows $6,626.66 Simple payback period (after-tax) = $27,222 : $6,626.66 = 4.108 years IRR: (uses annual after-tax cash flows shown above) A B 1 IRR 15.42% Cell B1 formula: =IRR(B4:B11) 3 Year Cash Flows 4 Year 0 $(27,222.00) 5 Year 1 6,626.66 6 Year 2 6,626.66 Year 3 6,626.66 Year 4 6,626.66 Year 5 6,626.66 10 Year 6 6,626.66 11 Year 7 6,626.66