7-5 Cash Flow Vs Accounting Income Today Year 1 Year 2 Cash Income $1500$500 Project Cost 2000 Free Cash flow -2000 +1500 +500 20001500500 Cash npv $22314 1.10(10)2(1.10) Irwin/McGraw-Hill CThe McGraw-Hill Companies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 7- 5 Irwin/McGraw-Hill Today Year 1 Year 2 Cash Income $1500 $ 500 Project Cost - 2000 Free Cash Flow - 2000 +1500 + 500 Cash NPV = - 2000 1.10 + + = − 1500 110 500 110 14 2 3 ( . ) ( . ) $223. Cash Flow vs. Accounting Income