Confusing in how to calculate the Cash flow PV

Exam Example NPV & DCFROR calculations Example A process is projected to have a total depreciable capital investment of $90 million, to spent in equal amounts over three years (2007 -2021) The st art-up capital is expected to be $40 million, invested just prior to start-up and recovered at the end of the project life, in year 15. The re annum, are expected to be: venue from production, and associated production costs, in $ million per Costs (MS/a) Revenue (MS/a) Year 4 Year 5 Year 6 Years 7-15 75 113 150 150 78 100 100 Depreciation is calculated on a non-linear basis - shown on the next slide. Taxable income is [Sales revenue less Costs less Depreciation allowance] Tax is 40% of Taxable income Annual cash flow is: [Sales revenue - Costs Tax- Capital invested] The Net Present Value (assuming i = 15%) is to be calculated. The DCFROR over the project life is to be calculated. Seider, Seader & Lewin, Product and Process Design Principles, 2003, Ch 17 (Examples 17.14 &17.29) Seider, Seader, Lewin & Widagdo, 2010, Product and Process Design Principles, Ch. 23.7 (example 23.29) Process Design and Simulation 2019 6-114 Example - NPV & DCFROR Cash flows Example (All cash flows in MS/a) Cash CashCu Taxable Tax Invested Working Depreci- Costs Sales Capita Capital ation Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 30-30.00 30.00 30 -26.09 -56.09 70 52.93 -109.02 19.2 12.62 -96.39 6.22.48 32.52 18.59 77.80 28.8 17.28 10.37 0.37 00 150 32.72 1309 36.91 18.35 -59.45 100 150 39.63 15.85 34.15 14.76 44.68 150 39.63 15.85 34.15 12.84 -31.85 5.18 -100 1501-4482 -17.93 32.07 -10.48 --21.36 12.83 5.42 100 150 20 20 8.53 7.42 6.45 30 30 30 30 4.88 11.51 100 150 50 50 2018 6.64 20 70 9.8921.41 2021 * Depreciation as given by Seider et al., 2010 -E-D-L, Y: 0 OF # To calculate DCFROR, similar calculations are carried out, iteratively, until the NPV (Cumulative PV) is equal to 0 after 15 years. (in this case i-18.5%) Seider, Seader, Lewin & Widagdo, 2010, Product and Process Design Principles, Ch. 23.7 (example 23.29) Process Design and Simulation 2019 6-115