Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Equipment will have to be purchased before manufacturing of the product can commence. Quotes indicate this will cost $3,000,000. The equipment will be depreciated using
Equipment will have to be purchased before manufacturing of the product can commence. Quotes indicate this will cost $3,000,000. The equipment will be depreciated using the prime cost method at a rate of 15% per annum for tax purposes and be sold at the end of the last year of the project for an expected $2,000,000.(the project has 5 years life)
What does 15% mean when I'm calculating corporate cash flow? How to use it?
Do you think my calculations below are right?
beg end end end end end beg end end end end end equipment cost 3,000,000 2970000 2940000 2910000 2880000 2850000 SUIII 3000000 2550000 2167500 1842375 1566018.75 1331115.938 sum depreciation per year remarks 30000 (400000300000)E5*153 30000 30000 30000 30000 150000 450000 382500 325125 276356.25 234902.8125 1668884.063Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started