We are applying the taxes to our OCF, so we can create a second NPV function to take out taxes each period.

def NPV2(arr,t):
    return sum([x.PV*(1-t) for x in arr])

t represents a tax rate we apply, we multiply our present value by (1-t) because that is the percent of our operating cash flow that we get to keep.

Solution 3

NCS = [Cashflow(-100000,0,.05)]
OCF = [Cashflow(45000,1,.05),Cashflow(45000,2,.05),Cashflow(45000,3,.05),Cashflow(45000,4,.05),Cashflow(45000,5,.05)]
print(NPV(NCS)+NPV2(OCF,.2))

Now that we add this in we get a present value of: $ 55861.16.