Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

INFORMATION Zvapano Ldd is considering buying a machinery for its manufacturing facility. The new machine will be purchased from Namibia for R385 000. The cost

image text in transcribed

INFORMATION Zvapano Ldd is considering buying a machinery for its manufacturing facility. The new machine will be purchased from Namibia for R385 000. The cost of shipping the machine to the premises is R38 000 , and the cost of installation is R23 000 . The new machine will require working capital to increase by R95 000. The machine has a useful life of 5 years and depreciation is calculated over 5 years using the straightline method. The tax rate applicable to the company is 28%. The eamings before interest, tax, depreciation, and amortisation expected to be generated by the new machine are as follows: Five years after the purchase, the machine can be sold for R120 500 and that the removal and clean-up costs are R17 500 . The net working capital will be recovered

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_2

Step: 3

blur-text-image_3

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

The Major Accounting Firms Understanding The Role Of Global Auditing Giants

Authors: Seth Nashe

1st Edition

B0CGKZ5Y2Q, 979-8859081318

More Books

Students also viewed these Accounting questions

Question

What is the purpose of multiplexing?

Answered: 1 week ago