A water treatment plant will cost $85,000 and has an economic useful life of only five years and will have no salvage value. The plant is leveraged with a loan of $40,000 at 3% per annum to be amortised over 5 years by annual payments with the first payment to be made at the end of the first year. You elect to use the straight line (prime cost) method of depreciation which results in $17,000 per annum in depreciation. Income before tax is estimated as per the table below and income is received at the end of each year of the plants life. Tax is payable in the year of income, and you have sufficient alternate income to benefit from negative tax liabilities. The after-tax required return is 12% and the applicable tax rate is 30%.

Calculate the after-tax NPV of the project by completing the table below (must include workings and express answer as whole number).

Time in Years	0	1	2	3	4	5
Before-Tax Net Income (Property)	-$85,000	$16,000.00	$17,280.00	$18,662.40	$20,155.39	$21,767.82
Depreciation		$17,000	$17,000	$17,000	$17,000	$17,000
Annual interest (see solution below)
Taxable Income
Tax on taxable income
Loan and Mortgage Payment	-$40,000
Equity cash flow
NPV (After-tax disc rate)