Biotech, a medical imaging company has initiated a project that involves providing services for three years to the National Hockey League (NHL) studying the bone density of hockey players. Prior to this project, Biotech had a ten year contract with the NHL for the provision of the same services. During the ten contract period, Biotech used a cell analysis system. For the new three year contract, Biotech will trade-in the old system and replace it with the new system. Estimates of the project summarized in the following table.

1. Produce the Net Income Statement for the project (15 Marks).
2. Produce the Net Cash Flow Statement (5 marks)
3. Compute the disposal tax effect, G. (Show you calculations in detail) (5 Marks).
4. Calculate the total taxes that also include the asset disposal tax. (5 marks)

AutoSave 5 cli, ukith Kumar Heddly () - Word O Search ukith kumar reddy Poli LK File Home Insert Draw Design Layout References Mailings Review View Help Share Comments - . . . . A X Cut Pasta Format Painter Clipboard Title Dictate Sanctivity Editar Font Paragraph Styles Editing Vui Editor L 3 ... 5 e-ndu Arial 11 A A A ASE= Aahh. Replace BUXXAPA 1 Noma No Spac... Heading 1 Heading 2 Subtitle Select Sensitivity Liv. vuru ............ .... to the National Hockey League (NHL) studying the bone density of hockey players. Prior to this project, Biotech had a ten year contract with the NHL for the provision of the same services. During the ten contract period, Biotech used a cell analysis system. For the new three year contract, Biotech will trade-in the old system and replace it with the new system. Estimates of the project summarized in the following table. Description Project Old ten year contract Trade-in allowance, $ 7,500 Book value, UCCN$ 12,500 New three year contract Purchased Price of Systems, $ 122,500 Installation costs of Systems, $ 17,500 Annual Operating expenses,$ 15,650 Annual Gross Revenues, $ 139,000 CCA Class 8, CCA rate 15% Income Tax Rate 30% Capital Gains Tax Rate, tcg 20% Asset Useful Life, years 3 Estimated Salvage Value, SN $ 155,000 a) Produce the Net Income Statement for the project (15 Marks). b) Produce the Net Cash Flow Statement (5 marks) c) Compute the disposal tax effect, G. (Show you calculations in detail) (5 Marks). d) Calculate the total taxes that also include the asset disposal tax. (5 marks) Fanea 2 H Foua E 170 AutoSave 5 cli, ukith Kumar Heddly () - Word O Search ukith kumar reddy Poli LK File Home Insert Draw Design Layout References Mailings Review View Help Share Comments - . . . . A X Cut Pasta Format Painter Clipboard Title Dictate Sanctivity Editar Font Paragraph Styles Editing Vui Editor L 3 ... 5 e-ndu Arial 11 A A A ASE= Aahh. Replace BUXXAPA 1 Noma No Spac... Heading 1 Heading 2 Subtitle Select Sensitivity Liv. vuru ............ .... to the National Hockey League (NHL) studying the bone density of hockey players. Prior to this project, Biotech had a ten year contract with the NHL for the provision of the same services. During the ten contract period, Biotech used a cell analysis system. For the new three year contract, Biotech will trade-in the old system and replace it with the new system. Estimates of the project summarized in the following table. Description Project Old ten year contract Trade-in allowance, $ 7,500 Book value, UCCN$ 12,500 New three year contract Purchased Price of Systems, $ 122,500 Installation costs of Systems, $ 17,500 Annual Operating expenses,$ 15,650 Annual Gross Revenues, $ 139,000 CCA Class 8, CCA rate 15% Income Tax Rate 30% Capital Gains Tax Rate, tcg 20% Asset Useful Life, years 3 Estimated Salvage Value, SN $ 155,000 a) Produce the Net Income Statement for the project (15 Marks). b) Produce the Net Cash Flow Statement (5 marks) c) Compute the disposal tax effect, G. (Show you calculations in detail) (5 Marks). d) Calculate the total taxes that also include the asset disposal tax. (5 marks) Fanea 2 H Foua E 170