First of all we will calculate payback period as follow
| Year | Cash Flow |
Incremental Cash Flow |
| 0 | -250000 | -250000 |
| 1 | 47000 | -203000 |
| 2 | 52000 | -151000 |
| 3 | 75000 | -76000 |
| 4 | 94000 | 18000 |
As we can see that in the 4th year incremental cash flow go postive so pay abck period is
=76000*365/94000
=295 days
pay abck period is 3 year and 295 days
Now we will calculate BEP time as follow
| Year | Cash Flow |
PV factor @10% | Prasent value |
Incremental PV cash Flow |
| 0 | -250000 | 1 | -250000 | -250000 |
| 1 | 47000 | 0.909090909 | 42727.27 | -207273 |
| 2 | 52000 | 0.826446281 | 42975.21 | -164298 |
| 3 | 75000 | 0.751314801 | 56348.61 | -107949 |
| 4 | 94000 | 0.683013455 | 64203.26 | -43745.6 |
| 5 | 125000 | 0.620921323 | 77615.17 | 33869.52 |
As we can see that in the 5 th year incremental cash flow go positive so BEP time is
=43745.6*365 /77615.17
=206 days
pay abck period is 4 year and 206 days
Now we will calculate Net Present Value as follow
| Year | Cash Flow |
PV factor @10% | Prasent value |
| 0 | -250000 | 1 | -250000 |
| 1 | 47000 | 0.909090909 | 42727.27 |
| 2 | 52000 | 0.826446281 | 42975.21 |
| 3 | 75000 | 0.751314801 | 56348.61 |
| 4 | 94000 | 0.683013455 | 64203.26 |
| 5 | 125000 | 0.620921323 | 77615.17 |
| 33869.52 |
NPV = $V 33869.52
