10.1 Cash-flow forecasts for Finefodder's new superstore:

== NPV = -$5.4 million + (7.5361 x $612,000) -$787,907 which matches the value in Table 10-2 except for minor rounding error in the annuity factor.

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Investment 1. Sales 2. Variable costs 3. Fixed costs 4. Depreciation 5. Pretax profit (1-2-3-4) 6. Taxes (at 40%) 7. Profit after tax 8. Cash flow from operations (4+7) Net cash flow Year 0 -5,400,000 Years 1-12 16,000,000 13,280,000 2,000,000 450,000 270,000 108,000 162,000 612,000 -5,400,000 612,000