Steps Description Values n(time) FV r r/100 1+r/100 n (1+r/100)n

Present Value (Cash outflow) $400,000 Year 1 70,000 8 0.08 1.08 1 1.08
Discounted CF 8 Year 2 120,000 8 0.08 1.08 2 1.1664
Year 3 140,000 8 0.08 1.08 3 1.259712
Step1 Compute Present value for all the years (Separately) Year 4 140,000 8 0.08 1.08 4 1.36048896
Step2 Sum all the present values (Total Present value) 408959.4943 Year 5 40,000 8 0.08 1.08 5 1.4693280768
Step3 NPV (Total Present value - Cash Outflow) 8959
step4 % return(IRR) 8.8545 n(time) FV
step5 Profitability Index (PI) 1.02 Year 1 70,000
step6 Payback period (break even point) 3 years 6 months Year 2 120,000
Year 3 140,000
Year 4 140,000
Year 5 40,000
PV=FV/(1+r/100)^n n(years) FV PV=FV/(1+r/100)^n
64814.8148148148 1 70,000 64814.8148148148
102880.658436214 2 120,000 102880.658436214
111136.513742824 3 140,000 111136.513742824
102904.179391503 4 140,000 102904.179391503
27223.3278813501 5 40,000 27223.3278813501