[account123]

I also just wanted to make sure that the above NPV represents the nominal after-tax NPV of the project?

[account123]

Just on the above, John, I believe that I am on the right track with my answer. My main concern was in respect to accounting for the tax allowable depreciation.

On closer inspection of my calculations in this respect, I note that the above is slightly wrong.

Therefore, the tax benefits to carry forward are 350 (y1), 263 (y2), 197 (y3). For year 4, the tax benefit was 479. This takes into account deducting the scrap value of 400,000.

Therefore…

Net CF: -5000 – 350 – 1733 – 1104 2502 – -568
NDF: Same as above
PV: -5000 – 310 – 1357 – 765 – 1534 – -308

NPV – 1,343 million.

[Author]

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