Annuity Value

MMWCexcel1.xlsx

Sheet1

Revenue and costs					New revenue(equipment) and costs
Item	Daily	weekly	Annually		Item	Daily	Weekly	Annually
MMWC old capacity	9,600	67,200	3,494,400		New capacity	10,400	72,800	3,785,600
Number people to be served	686	4,802	249,704		Number of people served	743	5,201	270,452
revenue	21,952	153,664	7,990,528		Revenue	23,776	166,432	8,654,464
Less cost of sales/ food production					Less costs of sales/ Food production
Fixed costs	5,143	36,000	1,872,000		Fixed costs	5,143	36,000	1,872,000
Profit	16,809	117,664	6,118,528		Profit	18,633	130,432	6,782,464
Increase in profit due new project introduction	663,936		purchase price	700,000
			interest	56,000
Finance costs implication of the project.			Total cost of the asset	756,000
Incremental cash flow due to the project	663,936
intrest costs	56,000
cost of capital	9%
Net cash flow	607,936
Annuity value of annuity	3.8897
Net present value computation
present value of the cash flow after 5 years	2,364,689
Initial cost/purchase price	700,000
Net present value of the project	1,664,689