Question
Arizona Company is considering an investment in new machinery. The annual incremental profits/(losses) relating to the investment are estimated to be: Year 1 $'000
Arizona Company is considering an investment in new machinery. The annual incremental profits/(losses) relating to the investment are estimated to be: Year 1 $'000 (11) Year 2 3 Year 3 34 Year 4 Year 5 47 8 Investment at the start of the project would be $175,000. The investment sum, assuming nil disposal value after five years, would be written off using the straight-line method. The depreciation has been included in the profit estimates above, which should be assumed to arise at each year end. Required: A Compute the net cash flow for each of the five years. (6 marks)
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