Question
Galen Mining requires a digging machine that costs TZS 50,000,000. It will depreciate the machine uniformly over its life of 5 years. The tax rate
Galen Mining requires a digging machine that costs TZS 50,000,000. It will depreciate the machine uniformly over its life of 5 years. The tax rate of Galen is 35% and the proper discount rate is 11%. Because of the uncertain price of the ore, the expected pre-tax revenue (excluding depreciation) from the machine is TZS 15,000,000 annually, with a standard deviation of TZS 3,000,000.
a. Calculate the level of pre-tax revenue (excluding depreciation) enough to break even?
b. What is the probability that the machine will prove to be profitable?
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st f mhine TZS 50000000 Sine the mhine will dereite unifrmly ver 5 yers nnul dereitin st f Mhine N ...
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Probability And Statistical Inference
Authors: Robert V. Hogg, Elliot Tanis, Dale Zimmerman
9th Edition
321923278, 978-0321923271
