A business is evaluating a project for which the following information is relevant: Sales will be K100,000 in the first year and are expected to increase by 5% per year. Costs will be K50,000 and are expected to increase by 7% per year. Capital investment will be K200,000 and attracts tax allowable depreciation of the full value of the investment over the 5 year length of the project. The tax rate is 30%. The business uses a real discount rate of 9%. Calculate the NPV for the project.

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A business is evaluating a project for which the following information is relevant:

Sales will be K100,000 in the first year and are expected to increase by 5% per year.

Costs will be K50,000 and are expected to increase by 7% per year.

Capital investment will be K200,000 and attracts tax allowable depreciation of the full value of the investment over the 5 year length of the project.

The tax rate is 30%.

 

The business uses a real discount rate of 9%.

Calculate the NPV for the project.

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