Net cost of new assets Figure 3 Financial analysis of Project C Initial Expenditures 2022 S 100,000 2023 2024 2025 2026 Additional revenue Additional operating costs Depreciation Net increase in income Less: Tax at 33% Increase in after-tax income S S 22,000 S 33,000 S 49,500 $ 66,000 11,000 $ $ 5,000 S 5,000 S 5,000 S 5,000 5,000 $ 14,000 $ 20,000 17,500 $ 17,500 $ 17,500 S $ (3,000) S 10,500 S 27,000 S 43,500 (8,000) S " $ = $ 3,465 S (8,000) S (3,000) $ 8.910 7,035 $ 18,090 $ 29,145 S 14,355 Add back depreciation $ S 20,000 S 17,500 S 17,500 17,500 14,000 Net change in cash flow (100,000) S S 17,000 S 24,535 S 35,590 S 46,645 6,000 Figure 4 Financial analysis of Project D Initial Expenditures 2022 2023 2024 2025 2026 $55,000 Net cost of new assets Additional revenue S 45,000 S 37,500 S 10,000 S 8,500 S 6,500 Additional operating costs S 3,000 S 4,000 S 5,000 S 5,500 S 6,000 Depreciation $ 8,000 $ 12,000 $ 11,000 $ 11,000 $ 11,000 Net increase in income S 34,000 S 21,500 S (6,000) S (8,000) S (10,500) Less: Tax at 33% $ 11,220 $ 7,095 = S = $ = Increase in after-tax income $ 22.780 $ 14.405 S (6,000) S (8,000) $ (10,500) Add back depreciation S 8,000 S 12,000 S 11,000 S 11,000 S 11,000 Net change in cash flow. S (55,000) $ 30,780 $ 26,405 S 5,000 S 3,000 S 500