Question
Compute: increasing in net fixed assets, decrease in accrued taxes, retained ratio, cost of new asset, net income before tax, net cash flow for the
Compute: increasing in net fixed assets, decrease in accrued taxes, retained ratio, cost of new asset, net income before tax, net cash flow for the period, initial cash outflow, incremental cash flow for the terminal year before project windup considerations and, total amount of uses according to the information given below: PLEASE SHOW HOW YOU COMPUTE EACH OF THE ITEMS.
Annual cash dividend payments : $3400
Decreasing in net working capital : $1400
Depreciation amount (charge) : $13335
Depreciation rate (MACRS) : 44.45%
Final salvage value of new asset (after tax) : $3800
Gross additions to fixed assets : $29550
Net book value of the old asset : $8000
Net change in income after taxes for the period : $7165
Net income after tax (annual earnings) : $17000
Selling price of the old asset : $6000
Tax prepayment : $640 Tax rate : 20%
Terminal-year incremental net cash flow : $13000
Total amount of sources : $39.000
Total tax payment : $5200
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