discussion

Week 4 Discussion

	YEAR 1	YEAR 2	YEAR 3	YEAR 4	YEAR 5
ANNUAL COST FLOW	300,000	300,000	500,000	800,000	4,000,000
PV FACTOR= (1+R)-N	0.9009	0.8116	0.7312	.6587	.5935
PRESENT VALUE	270,270	243,480	365,600	526,960	2,374,000

R= RATE OF RETURN (MY BIRTHDAY)

N= PERIOD/YEAR

Cost of Investment = Cost of plant and equipment 2,000,000 + Working Capital 1,000,000 = 3,000,000

NPV= PV of cash flow- cost of investment

NPV= 3,780,310- 3,000,000=780,310