Tax calculation = 77,422× 30% =23,227

Tax is a certain amount that is calculated on net earnings and tax rate in Australia is 30% the amount after tax is net value that is remain after deduction of the tax.

Depreciation Add back: Depreciation is a non cash items but included in the cash flow expenses therefore it should be add back to get true position of the accounts.

Cash flow: Cash flow is representing the transactions of the project those are based on cash and cumulative cash flow is net cash flow at each year.

Net present value: Net present value is difference between present value of cash inflows and the present value of cash outflows that based on the given period of the time and this project shows positive NPV which means that the project is acceptable. It is calculated in below:

Internal Rate of Return

Present value of cash flow      =         $ 226,295

Less: initial investment           =          $ 202,800

Net present value                    =          $ 23495

So it could be said that IRR of the project is 12% on which net present value of the project is at lowest level and could be beneficial for the investor to invest in the project.