Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

compute the gross profit and the profit of loss aftee taxes per year. The Transporting AMD company is planning to set up a freight hub,

image text in transcribed

compute the gross profit and the profit of loss aftee taxes per year.

The "Transporting AMD" company is planning to set up a freight hub, as a new investment. The Cost (C) of the investment is 9,500 (it is paid for starting this investment). The investment is expected to have 5 years useful life. Depreciation (D) is expensed on a straight-line basis (meaning the same amount is expensed in each period over the asset's useful life). The salvage value is 1.500 (resale value after depreciation is complete at the end of its useful life of the investment). The Total Revenues (TR) from services per year is 8,250 (cash inflows). The Fixed Cost (FC) comprises several selling, general and administrative expenses (SG&A) without depreciation and are paid for the investment's operation per year 1.000 (cash outflows). The Variable Cost (VC) is the direct cost of services and paid for the investment's operation per year at the level of 3,650 (cash outflows). Acceptable payback period for the investment is 3 years Last, the tax rate for the company is 30%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Regulation In Europe

Authors: McLeay Stuart

1st Edition

0333694600, 9780333694602

More Books

Students also viewed these Accounting questions