Corporate Finance Institute. All rights reserved. Capital Investment Model 2 3 4 5 6 7 8 9 10 Revenues $0 $0 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 Expense 1 $0 $0 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 Expense 2 $500 $500 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Expense 3 $0 $0 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 Expense 4 Profit $0 $0 $6,300 $6,300 $6,300 $6,300 $6,300 $6,300 $6,300 $6,300 ($500) ($500) $47,200 $47,200 $47,200 $47,200 $47,200 $47,200 $47,200 $47,200 Capital Investment Cash Flow (Annual) $50,000 $50,000 ($50,500) ($50,500) $47,100 $100 $100 $100 $100 $47,100 $47,100 $47,100 $100 $47,100 $100 $47,100 $100 $100 $47,100 $47,100 Cash Flow (Cumulative) ($50,500) ($101,000) ($53,900) ($6,800) $40,300 $87,400 $134,500 $181,600 $228,700 $275,800 Cash Flow (Cumulative) ($50,500) ($101,000) ($53,900) ($6,800) $40,300 $87,400 $134,500 $181,600 $228,700 $275,800 NPV 10% $120,021 15% $77,715 20% $48,354 Cash Flow Cash Flow (Annual) Cash Flow (Cumulative) $300,000 IRR 36% $250,000 $200,000 Payback 5 Years $150,000 $100,000 $50,000 $0 ($50,000) ($100,000) ($150,000) 1 2 3 4 5 6 7 8 9 10