Project- Establishing a chloromethane plant in Gujrat,India

Cost of debt 8%
After tax cost of debt 6%
Cost of Equity 13%
WACC 7.8%

Cash Outflow Year 1- (150)
CF Year 2- 0
CF Year 3- 18
CF Year 4- 24
CF Year 5- 39
CF Year 6-39
CF Year 7-39

The plant life is 20 years. If I have to calculate the NPV, how to find the terminal value from year 6?

Comments (2)


If the plant has a life of 20 years, there is no point in calculating a terminal value. Terminal value assumes that the cash flows will be produced in to perpetuity.

Forecast the cash flows out for 20 years and discount those to calculate your NPV.

Financial Modeling

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