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Investment A Initial Expenditure Year#1 Year#2 Year#3 Year#4 Year#5 Net Investment Cost ($800,000) Additional Revenue $100,000 $200,000 $300,000 $450,000 $600,000 Additional Operating Expenses ($40,000) ($40,000)
Investment A | ||||||
Initial Expenditure | Year#1 | Year#2 | Year#3 | Year#4 | Year#5 | |
Net Investment Cost | ($800,000) | |||||
Additional Revenue | $100,000 | $200,000 | $300,000 | $450,000 | $600,000 | |
Additional Operating Expenses | ($40,000) | ($40,000) | ($40,000) | ($40,000) | ($40,000) | |
Amortization | ($120,000) | ($176,000) | ($168,000) | ($168,000) | ($168,000) | |
Net Increase in Income | ($800,000) | ($60,000) | ($16,000) | $92,000 | $242,000 | $392,000 |
Less: Tax@33% | ($30,360) | ($79,860) | ($129,360) | |||
Increase in Aftertax Income | ($60,000) | ($16,000) | $61,640 | $162,140 | $262,640 | |
Add back Amortization | $120,000 | $176,000 | $168,000 | $168,000 | $168,000 | |
Net Change in CashFlow | ($800,000) | $60,000 | $160,000 | $229,640 | $330,140 | $430,640 |
WACC | 8.00% | |||||
Year#1 | Year#2 | Year#3 | Year#4 | Year#5 | ||
Internal Rate of Return (IRR) | ||||||
Net Present Value (NPV) | ||||||
Payback Period |
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