Question: Year 0 1 2 3 4 5 6 7 Initial Investment -10,000,000 Sales 3,895,000 3,895,000 Variable costs 500,000 500,000 Fixed costs 400,000 400,000 Depreciation 1,380,262
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | |
| Initial Investment | -10,000,000 | ||||||||
| Sales | 3,895,000 | 3,895,000 | |||||||
| Variable costs | 500,000 | 500,000 | |||||||
| Fixed costs | 400,000 | 400,000 | |||||||
| Depreciation | 1,380,262 | 1,333,587 | |||||||
| Pretax profit | |||||||||
| Taxes (at 35%) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Profit after tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Cash flow from operations | 1,380,262 | 1,333,587 | 0 | 0 | 0 | 0 | 0 | ||
| Real Discount rate | 10.00% | ||||||||
| Present value of cash inflows | 2,356,922 | ||||||||
| Net Present value | -7,643,078 | ||||||||
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