Table 1: NPV and EVA investment decision analysis of agricultural water project (unit: 10 thousand RMB) Time (year) 2 3 4 Initial investment 100000 Operation income Operation cost Depreciation Income taxation 80000 80000 80000 80000 80000 45000 20000 3750 45000 45000 45000 45000 20000 3750 20000 3750 20000 20000 3750 3750 11250 31250 NOPAT 11250 11250 31250 11250 11250 After-tax cash flow 31250 31250 31250 NPV 18462 10000 Capital cost EVA 10000 10000 10000 10000 1250 1250 1250 1250 1250 MVA 18462

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter7: Nonlinear Optimization Models
Section: Chapter Questions
Problem 56P
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Calculate the total annual cost and net annual revenue of the project.

Rate of interest = 10%

Table 1: NPV and EVA investment decision analysis of agricultural water project (unit: 10 thousand RMB)
Time (year)
3
4
Initial investment
100000
Operation income
Operation cost
Depreciation
Income taxation
80000
80000
80000
80000
80000
45000
45000
45000
45000
45000
20000
20000
20000
20000
20000
3750
3750
3750
3750
3750
NOPAT
11250
11250
11250
11250
11250
After-tax cash flow
31250
31250
31250
31250
31250
NPV
18462
Capital cost
EVA
10000
10000
10000
10000
10000
1250
1250
1250
1250
1250
MVA
18462
Transcribed Image Text:Table 1: NPV and EVA investment decision analysis of agricultural water project (unit: 10 thousand RMB) Time (year) 3 4 Initial investment 100000 Operation income Operation cost Depreciation Income taxation 80000 80000 80000 80000 80000 45000 45000 45000 45000 45000 20000 20000 20000 20000 20000 3750 3750 3750 3750 3750 NOPAT 11250 11250 11250 11250 11250 After-tax cash flow 31250 31250 31250 31250 31250 NPV 18462 Capital cost EVA 10000 10000 10000 10000 10000 1250 1250 1250 1250 1250 MVA 18462
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