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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
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
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