Question

YEARS	0	1	2	3	4	5	6
New Plant Costs	(24,000,000)
Land	(4,300,000)
Inventory	(1,000,000)
Sales		63,000,000	63,000,000	63,000,000	63,000,000	63,000,000	63,000,000
Costs		(20,000,000)	(20,000,000)	(20,000,000)	(20,000,000)	(20,000,000)	(20,000,000)
Depreciation Expense		(3,429,600)	(5,877,600)	(4,197,600)	(2,997,600)	(2,143,200)	(2,140,800)
Profit Before Tax		39,570,400	37,122,400	38,802,400	40,002,400	40,856,800	40,859,200
40% Tax Rate		(15,828,160)	(14,848,960)	(15,520,960)	(16,000,960)	(16,342,720)	(16,343,680)
Profit After Taxes		23,742,240	22,273,440	23,281,440	24,001,440	24,514,080	24,515,520
Add Back Depreciation		3,429,600	5,877,600	4,197,600	2,997,600	2,143,200	2,140,800
After Tax CF		27,171,840	28,151,040	27,479,040	26,999,040	26,657,280	26,656,320
After-Tax Salvage Value							6,085,440
Sale of Land							5,400,000
Net Cash Flow	(29,300,000)	27,171,840	28,151,040	27,479,040	26,999,040	26,657,280	38,141,760

I need to calculate NPV at 9.24%. My Net cash flow is similar to many of the examples I viewed in Chegg but my NPV rate per year is incorrect when using Excel NPV. Please show me how to calculate percentage rate by year. Thanks

Answer 1

Net Cash Flow	$ -2,93,00,000	$   2,71,71,840	$ 2,81,51,040	$ 2,74,79,040	$ 2,69,99,040	$ 2,66,57,280	$ 3,81,41,760
PVIFA at 9.24% [PVIFA = 1/1.0924^n]	1	0.91542	0.83799	0.76711	0.70222	0.64282	0.58845
PV at 9.24%	$   -2,93,00,000	$     2,48,73,526	$   2,35,90,169	$ 2,10,79,314	$ 1,89,59,268	$    1,71,35,918	$ 2,24,44,533
NPV	$     9,87,82,729