7-4 Cash Flow Vs Accounting Income Year 1 Year 2 Cash Income $1500$500 Depreciation -$1000-$1000 Accounting Income 500 500 Accounting NPV 500-500 $41.32 1.10(1.10) Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 7- 4 Irwin/McGraw-Hill Year 1 Year 2 Cash Income $1500 $ 500 Depreciation -$1000 -$1000 Accounting Income + 500 - 500 Accounting NPV = 500 1.10 + − = 500 110 32 2 ( . ) $41. Cash Flow vs. Accounting Income