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→Calculations in the cash flow model
After the revenue and expenditure schedule has been determined, we can now calculate cash income taxes for our project. Finally, once the cash income taxes have been calculated for each year, the [[The time value of money|cash flow time diagram]] can be prepared and we are ready to calculate the net present value for our venture.
After the revenue and expenditure schedule has been determined, we can now calculate cash income taxes for our project. Finally, once the cash income taxes have been calculated for each year, the [[The time value of money|cash flow time diagram]] can be prepared and we are ready to calculate the net present value for our venture.
For now, let's assume we are provided the cash income tax number, so we are ready to look at an example problem for a single development well. The assumptions for this example problem and a completed worksheet are presented in [[:Image:http://wiki.aapg.org/File:Charles-l-vavra-john-g-kaldi-robert-m-sneider_capillary-pressure_1.jpg|Table 1]].
For now, let's assume we are provided the cash income tax number, so we are ready to look at an example problem for a single development well. The assumptions for this example problem and a completed worksheet are presented in Table 1.
{| class="wikitable"
{| class="wikitable"
|+ '''Table 1. Cash Flow Model for a Development Well.'''
|+ '''Table 1. Cash Flow Model for a Development Well.'''
|-
|-
| Gas Prices $/MCF || 1.500 || 1.500 || 1.500 || 1.500 || 1.500 || 1.500 || 1.500 || 1.500 || 1.500
| Gas Prices $/MCF || 1.500 || 1.500 || 1.500 || 1.500 || 1.500 || 1.500 || 1.500 || 1.500 || 1.500
|-
| colspan=10 align=middle | CALCULATIONS
|-
| Gross Income, $M || 0.000 || 1576.075 || 864.968 || 474.705 || 260.503 || 142.978 | 78.468 || 43.064 || 2.752
|}
|}