This first picture is the scenario that needs to be answered in the second picture

Furnace Fuel Air Scrubbers Air Scrubbers Furnace Fuel Change Change Average Average Average Average Required Investment S 225,000 $ 150,000 Year Net Book Year Net Book Income Value Income Value Annual Cash Flows S 60,000 $ 56,000 38,000 $217,500 1 34,000 $145,000 Annual Net Income S 38,000 $ 34,000 2 38,000 202,500 2 34,000 135,000 Project Life 15 years 15 years 3 38,000 187,500 3 34,000 125,000 Average Book Value S 112,500 $ 75,000 4 38,000 172,500 4 34,000 115,000 Cost of Capital 10% 10% 5 38,000 157,500 5 34,000 105,000 6 38,000 142,500 6 34,000 95,000 7 38,000 127,500 7 34,000 85,000 8 38,000 112,500 8 34,000 75,000 9 38,000 97,500 9 34,000 65,000 10 38,000 82,500 10 34,000 55,000 11 38,000 67,500 11 34,000 45,000 12 38,000 52,500 12 34,000 35,000 13 38,000 37,500 13 34,000 25,000 14 38,000 22,500 14 34,000 15,000 15 38,000 7,500 15 34,000 5,000 Average $ 38,000 $112,500 Average $ 34,000 $ 75,000 N wB3 X V f M 2 Air Scrabbers IRA Worksheet 4 5 Air Scrubbers Furnace Fuel Change Period Cash Flow Hat Present False aring the hannity Table In determine PP -f carb Flow MPF - Initial Cart . (Not Bansal Cark Amount Factor Precent Value HPT - Initial Care. (Hot Assmal Cark Amount Factor Present Value Initial investment Initial investment PV of Annual net cash flow For 15 veare PV of Annual net cash flow for 15 yobra Net preceat value Net present value 12 OR OR Net Present Value Using Excel to determine PV cash flow Het Present Value Using Excel to determine PV cash flow MPF - Initial Cart + PF of Cark Flex Present Value MPT - Initial Care . PY of Carb Flou Present Value 15 Initial investment Initial investment PV of Annual net cash flow for 15 pests =PV[rate, valuel[value2]) PV of Annual net cash flow for 15 years =PV(rate,value1,[value2]] Not present value Net present value 18 19 Payback Period = Initial Investment / Net Annual Cash Flow Payback Period = Initial Investment / Net Annual Cash Flow 20 21 22 23 Internal Rate of Return Internal Rate of Return 24 Using Annuity Table Using Annuity Table Furmance Fuel Change 25 OR OR IRR Worksheet 26 Using Excel =IRR(16:M21) use the IRR worksheet Using Excel =IRR(M26:M41) uro the IRR worksheet Period Cash Flow 27 28 Average Rate of Retera = Ave Net Income / Are Book Value of investment Average Rate of Reters = Are Net Income / Ave Book Value of investment 29 30 31 32 33 34 35 36 37 35 39