NPV Analysis: Calculation of NPV for the Given Problem (Math Problem Sample)

NPV AnalysisStudent’s nameUniversity name
In order to determine whether a project is valid or not, we calculate the NPV. The table below shows step by step calculation of the present value of the project.
 

year 1

year 2

year 3

year 4

year 5

 

5454.54

4958.68

4507.89

4098.1

3725.53

depreciation

8000

4800

2880

1728

1036.8

 

-2545.46

158.68

1627.89

2370.1

2688.73

taxation of 30%

-1781.822

111.076

1139.523

1659.07

1882.111

 

 

 

 

 

 

After tax

6218.178

4911.076

4019.523

3387.07

2918.911

salvage

 

 

 

 

1555.2

 

 

 

 

 

 

Present value

6218.178

4911.076

4019.523

3387.07

4474.111

Total Present value

23009.958

 

 

 

 

after 10% cost of capital

20708.9622

 

 

 

 

TOTAL
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