Solution 5
This challenge is easy, we have an outflow at period 0, and an inflow at period 5.
Solution 5
NWC = [Cashflow(-50000,0,.05),Cashflow(50000,5,.05)]
print(NPV(NWC))
print(NPV(NCS)+NPV2(OCF,.2)+NPV(taxShield(100000,0,5,.2,.05))+NPV(NWC))If you did this correctly, you will see that you end up losing $10823.69. Why do you lose money? This is because you are not able to invest that $50,000 during the 5 year time period. The last line prints our total NPV.
Challenge
Now, the salvage value of your equipment in period 5 is $50,000 because you can sell it for that to another company. Assume you sell it for exactly that, and adjust your depreciation for that.