Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In a project that will last for 3 years, revenues will increase by 1 2 0 , 0 0 0 TL each year, and costs

In a project that will last for 3 years, revenues will increase by 120,000 TL each year,
and costs will decrease by 50,000 TL each year. The cost of the acquired asset is
1,000,000 TL, and the firm uses the declining balance method for depreciation
(Depreciation rate is 40%). Calculate the operating cash flows for 3 years. The tax rate
is 30%.
2. In an investment project, an old machine bought for 600,000 TL 3 years ago with a
useful life of 10 years will now be sold for 300,000 TL. What will be the cash flow
from the sale of the old machine, given that the firm uses the straight-line depreciation
method? (Tax rate is 40%)
3. A company is planning to buy a machine. The cost of the new machine is 50,000 TL
and the transportation and installation cost is 30,000 TL. The old machine is fully
depreciated and can be sold for 7,000 TL as soon as the new machine is acquired. The
useful life of the new machine is 5 years and the company uses the straight-line
depreciation method. What should be the cash inflow/outflow related to this
investment? (Tax rate is 40%)

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

Real Estate Finance And Investments

Authors: William Brueggeman, Jeffrey Fisher

13th Edition

0073524719, 9780073524719

More Books

Students also viewed these Finance questions

Question

Tell me what you know about our organization and the position.

Answered: 1 week ago

Question

Why do you think most employers opt for the home-based salary plan?

Answered: 1 week ago