The Directors have identified that the required additional new machinery will cost £18m and will have an expected life of 3 years.
Net Cash Inflow:
YEAR 1 - £3,450,000
YEAR 2 - £3,795,000
YEAR 3 - £4,395,000

Working capital totaling to 15% of each year’s cash flows need to be in place at the start of each year. All working capital will be returned at the end of the expected life.

It is expected the machinery used will have a scrap value of £4.5m at the end of its useful life.

The machinery attracts tax allowable depreciation at a rate of 25% reducing balance.

Corporate tax is payable at 30%. Tax cash flows are payable or receivable one year in arrears.
Kitchen Appliances plc currently uses a cost of capital discount factor of 8%. Complete a Net Present Value schedule/table