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Amreli Steels Limited can invest Rs.50,000 in a new plant. The plant has an expected life of 5 years and expected sales are Rs.90,000 a
Amreli Steels Limited can invest Rs.50,000 in a new plant. The plant has an expected life of 5 years and expected sales are Rs.90,000 a year. Variable cost of sales is 60% and fixed costs are Rs.10,000 a year (excluding depreciation). The plant will be depreciated straight line over 5 years to a salvage value of zero. The cost of capital is 10% and tax rate is 40%. Calculate Identical Cash flow for each year.
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