The second phase will start at T=4. The company expects the following income for the second phase:

Item/Year	T=4	T=5	T=6	T=7	T=8	T=9
Capital Investment	2500
Working capital	500
EBT		350	350	500	600	750

After year 9, the EBT continues at $750 for the next 6 years (until year 15), at the end of which of the factory will be sold for $2000. The companys depreciation and capital investments each year are the same.

What is the NPV of Phase II?

Tax rate is 30% and discount rate is 20%.

I see that your page; How to get PV 98.460? in excel file?

Calculation of NPV Year EBT 5 350 6 350 7 500 8 600 9 750 10 750 11 750 12 750 13 750 14 750 15 750 (Salvage + 15 WC) (Investment 4 + WC) Tax@30% EAT 105 245 105 245 150 350 180 420 225 525 225 525 225 525 225 525 225 525 225 525 225 525 2500 PVIF 3000 PVOF PVF@ 20% PV 0.402 98.460 0.335 82.050 0.279 97.679 0.233 97.679 0.194 101.749 0.162 84.790 0.135 70.659 0.112 58.882 0.093 49.069 0.078 40.890 0.065 34.075 0.065 162.264 (Sum of PV)978.245 0.482 1446.759 1446.759