Management accounting

"Based on the data given and the Present Value Analysis performed , the following conclusions can be made "The NPV of the investment is negative if taken from before tax cashflows "The NPV of the investment is positive if taken from after tax cashflows "Thus , based on the NPV calculations , the project should be accepted as it is providing tax benefits and the net present value after tax turns out to be positive "Based only on before tax cashflows and its NPV , the projet should be rehected as it does not provide benefits more than its costs "Other factors that should

be given consideration should be the life after 20 years that may be possible by investing something at that point to make the lifts working again "The salvage value of terminal cashflows should also be given consideration for the last year as it can be a major cashflow item "The costs that may be required at the end of 20 years to bring the land and property to its origional condition may add to cash outflows for last year "Incremental Cash Flow Analysis "Year "0 "1 "2 "3 "4 "5 "6 "7 "8 "9 "10 "11 "12 "13 "14 "15 "16 "17 "18 "19 "20 "Investment "- "Setup and Preparation "-1300000 "Revenue "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "660000 "Expenses "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "-100000 "Added Expense "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "-1500 "Depreciable Amount "Depreciation (MACRS 10 yrs "0 .3945 "0 .7891 "0 .144 "0 .1152 "0 .0922 "0 .0737 "0 .0655 "0 .0655 "0 .0656 "0 .0655 "0 .0328 "1130000 "2034000 "1627200 "1301760 "1041860 "832810 "740150 "740150 "741280 "740150 "370640 "Tax benefit "452000 "813600 "650880 "520704 "416744 "333124 "296060 "296060 "296512 "296060 "148256 "Net Cash Flow "- "1010500 "1372100 "1209380 "1079204 "975244 "891624 "854560 "854560 "855012 "854560 "706756 "558500 "558500 "558500 "558500 "558500 "558500 "558500 "558500 "558500 "Present Value (14 "- "886403 "1055786 .3958141 "816297 .5 "638975 .8 "506511 .4 "406211 .2 "341514 .4 "299573 .6 "262922 .5 "230512 "167230 .9 "115921 .9 "101685 .9 "89198 "78243 "68634 "60206 "52812 "46326 "40637 "NPV before Tax "-5034393 "-4520000 "675400 "1037000 "874280 "744104 "640144 "556524 "519460 "519460 "519912 "519460 "371656 "223400 "223400 "223400 "223400 "223400 "223400 "223400 "223400 "223400 "PV (8 "-4520000 "625370 "889060 .9 "694031 .4 "546938 .2 "435671 .5 "350704 .3 "303099 .8 "280648 .6 "260085 .1 "240610 "159396 .1 "88715 "82143 "76058 "70424 "65208 "60378 "55905 "51764 "47930 "NPV After Tax "864147 .7...