DISCOUNTED CASH FLOW

No Item
0 1
1 Fixed-capital investment $ 312,727
2 Working capital $ 46,909
3 Total capital investment (1 + 2) $ 359,636
4 Annual income (sales) $ 541,728
5 Annual manufacturing cost
(a) Raw materials $ 167,211
(b) Labor $ 45,983
(c) Utilities $ 41,803
(d) Maintenance and repairs $ 6,255
(e) Operating supplies $ 1,251
(f) Laboratory charges $ 4,180
(g) Patents and royalties $ 2,090
(h) Local taxes and insurance $ 3,005
(g) Plant overhead $ 33,442
Total of line 5 $ 305,220

6 Annual general expenses

(a) Administrative $ 12,541
(b) Distribution and selling $ 16,721
(c) Research and development $ 20,901
(d) Interest $ 14,385
Total of line 6 $ 64,549

7 Total product cost (5-T + 6-T) $ 369,768

8 Annual operating income (4 - 7) $ 171,960
MACRS 20.00
9 Annual depreciation $ 62,545

10 Income before tax (8 - 9) $ 109,414

11 Income after 25% tax (0.750 X 10) $ 82,061
12 Annual cash income (9 + 11) $ 144,606
13 Annual cash flow (12-3) $ (215,030)
14 Discount factors for 12% interest 1 0.8928571429
15 Annual present value (13 x 14) $ 129,113
16 TOTAL present value of annual cash flows $ 619,842
17 NPV $ 260,206
DISCOUNTED CASH FLOW

YEAR
2 3 4 5

$ 541,728 $ 541,728 $ 541,728 $ 541,728 $ 541,728

$ -
$ 167,211 $ 167,211 $ 167,211 $ 167,211 $ 167,211
$ 45,983 $ 45,983 $ 45,983 $ 45,983 $ 45,983
$ 41,803 $ 41,803 $ 41,803 $ 41,803 $ 41,803
$ 6,255 $ 6,255 $ 6,255 $ 6,255 $ 6,255
$ 1,251 $ 1,251 $ 1,251 $ 1,251 $ 1,251
$ 4,180 $ 4,180 $ 4,180 $ 4,180 $ 4,180
$ 2,090 $ 2,090 $ 2,090 $ 2,090 $ 2,090
$ 3,005 $ 3,005 $ 3,005 $ 3,005 $ 3,005
$ 33,442 $ 33,442 $ 33,442 $ 33,442 $ 33,442
$ 305,220 $ 305,220 $ 305,220 $ 305,220 $ 305,220
$ -
$ -
$ 12,541 $ 12,541 $ 12,541 $ 12,541 $ 12,541
$ 16,721 $ 16,721 $ 16,721 $ 16,721 $ 16,721
$ 20,901 $ 20,901 $ 20,901 $ 20,901 $ 20,901
$ 14,385 $ 14,385 $ 14,385 $ 14,385 $ 14,385
$ 64,549 $ 64,549 $ 64,549 $ 64,549 $ 64,549

$ 369,768 $ 369,768 $ 369,768 $ 369,768 $ 369,768

$ 171,960 $ 171,960 $ 171,960 $ 171,960 $ 171,960
32.00 19.20 11.52 11.52 5.76
$ 100,073 $ 60,044 $ 36,026 $ 36,026 $ 18,013

$ 71,887 $ 111,916 $ 135,934 $ 135,934 $ 135,934

$ 53,915 $ 83,937 $ 101,950 $ 101,950 $ 101,950
$ 153,988 $ 143,981 $ 137,976 $ 137,976 $ 137,976
$ (61,042) $ 82,939 $ 220,915 $ 358,892 $ 358,892
0.7971938776 0.7117802478 0.6355180784 0.5674268557 0.5066311212
$ 122,758 $ 102,483 $ 87,686 $ 78,291 $ 78,291
 6

$ 46,909

0.4523492153
$ 21,219.25