This image shows a CPA finance and management accounting seven step NPV approach table from GevorgCPA.com for computing net present value of in house production, covering Step 1 writing out inputs including N, R, tax rate, initial investment as purchase price plus installation, and CCA class, Step 2 setting up the NPV shell with years across the top starting from 0 and cash flows in rows, Step 3 computing incremental cash flows from in house production savings skipping immaterial line items when time is limited, Step 4 computing after-tax cash flows by applying the tax rate, Step 5 computing NPV using the Excel NPV formula, Step 6 concluding that positive NPV means proceed with in house production, and Step 7 considering sensitivity analysis, relevant to CPA PEP and CFE candidates studying capital budgeting and NPV analysis.
