Cost 1,850,000 Relevant Depreciation Schedule installation 105.000 Cost of Capital after tax 14.65% Relevant Cost 1,955,000 life 3 Relevant Salvage Value end of year three 291.000 Relevant CB Y1 651 667 Depreciation - Straight Line Rate 1Ilife in years 0.66666666 Depreciation Diminishing value rate (SLR * 2) 7 Relevant CB Y2 217 222 Gain on Sale 218.593 Relevant Book Value and year three 72.407 Relevant CB Y3 72,407 Working Capital Invested year zero 96.000 Relevant Working capital Recovered year three 76.000 Relevant BV 72,407 Taxation rate 28% Relevant SV 291,000 Annual Marketing and Administration 178.000 Relevant I Rate Annual Sales 5,680,000 Relevant 40000 142 5% Annual Operating Expenditure 80% Relevant Investment Allowance 25% Relevant Pilot Study 149.000 Not Relevant Administration Charge 139.500 Not Relevant Taxable Income 0 1 2 3 Revenue 5,680,000 5.964.000 6.262.200 (4,544.000 (4,771,200 Operating Expenditure ) ) (5.009.760) Gain or Loss on Sale (Salvage Value - Book Value) 218,593 Investment Allowance (488 .750) (1,303,333 Depreciation ) (434.444) (144.815) Marketin and Administration 178.000 178.000 178 .000 Total 834,083 580,356 1.148.218 Tax 233.543 (162.500) Relevant Net Cash Flows 0 1 2 3 Revenue 5.680.000 5,964,000 6.262.200 (4,544,000 (4,771,200 Operating Expenditure ) ) (5,009,760) Salvage Value 291,000 Marketing and Administration (178.000) (178.000) (178.000) Outlay (1,955,000) Working Capital (96.000) 76,000 Tax 233,543 162,500 NCFAT 2.051.000 958.000 1,248,343 1,278,940 NPV 396,860 (321,501) 4 321.501 321.501