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N----CF---------PVIF(12%,N)----DCF----

0----($52,125)------------

1----$12,000----0.89286----$10,714.32

2----$12,000----0.79719----$9,566.28

3----$12,000----0.71178----$8,541.36

4----$12,000----0.63552----$7,626.24

5----$12,000----0.56743----$6,809.16

6----$12,000----0.50663----$6,079.56

7----$12,000----0.45235----$5,428.20

8----$12,000----0.40388----$4,846.56

-------------------------------------

------Sum of DCF-----------$59,611.68

NPV = $59,611.68 - $52,125

NPV = $7,486.68

Discounted Payback Period

N----CF---------PVIF(12%,N)--DCF---------CDCF

0----($52,125)(p)

1----$12,000----0.89286----$10,714.32----$10,714.32

2----$12,000----0.79719----$9,566.28----$20,280.60

3----$12,000----0.71178----$8,541.36----$28,821.96

4----$12,000----0.63552----$7,626.24----$36,448.20

5----$12,000----0.56743----$6,809.16----$43,257.36

6(q)-$12,000----0.50663----$6,079.56----$49,336.92(r)

7----$12,000----0.45235----$5,428.20(s)-$54,765.12

8----$12,000----0.40388----$4,846.56----$59,611.68

As you see the Year before recovery is 6

To get the remaining months out of the 7th Year, we do the following calculations

=($52,125-49,336.92)/5,428

=0.514 years

or 0.514 x 12 months

= 7 months

Discounted Payback Period is 6 years and 7 months

Regular Payback Calculation

N----CF---------CCF

0----($52,125)(p)

1----$12,000----$12,000

2----$12,000----$24,000

3----$12,000----$36,000

4(q)-$12,000----$48,000(r)

5----$12,000(s)-$60,000

6----$12,000----$72,000

7----$12,000----$84,000

8----$12,000----$96,000

Year before recovery is 4

To get the remaining months out of Year 5, we do the following calculations

=(52,125-48,000)/12,000

=0.34 years

=0.34 x 12 months

=5 months

Thus Regular Payback Period is 4 years and 5 months

using the CF function on a Financial Calculator your NPV would equal $111,736.68. Payback period would be 52125 / 12000 = 4.34 years

Investment 5.7 mil Cash Flow: 20.0 - 12.0 = 8.0 less 35% tax = 5.2 + 1.05 (35% tax saved on 3.0 deprc) = 6.25 PV of 6.25 (R 12%) = 5.58 NPV: 5.7 - 5.58 = .12, or 120,000 Positive