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How will this change if the gas increases to $3.68? Please include the work. 1) Calculation of Net Income 2) Operating Cash Flows Particulars Net
How will this change if the gas increases to $3.68? Please include the work.
1) Calculation of Net Income 2) Operating Cash Flows Particulars Net Profit After Tax Add Depreciation Operating Cash Flows Particulars Annual Revenue Less: Expenses Fuel Cost(WN 1) Depreciation Net Profit Before Tax Less Tax @21% Net Profit After Tax Car A Car B Car A Car B 20,000.00 20,000.00 5,473.85 6,083.66 9,242.50 7,832.50 14,716.35 13,916.16 (3,828.57) (4,466.67) (9,242.50 (7,832.50) 6,928.93 (1,455.08) (1,617.18) 5,473.85 6,083 7,700.83 WN 1 Fuels cost Car A 28 miles 40000 miles 40000 miles 3) NPV Cash Flows Particulars Operating Cash FlowS(A) PVAF @ 8% for 4 years B Net Present value of Cash inflows(C- A B) 48,740.55 46,090.32 Car B 24 miles Car A Car B Mileage(X Total Usage(y) Fuel Cost(Z) Total Cost(Y"Z/x) 14,716.35 13,916.16 3.312 3.312 $2.68 3828.57 $2.68 4466.67 Less: Initial Cash outflow(D) NPV of Cash flow(C-D) CAR B must be bought 36,970.00 31,330.00 WN 2: It has assumed that depreciation is charged at straightline basis 11,770.55 14,760.32Step by Step Solution
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