Question
Net Cash Flows Regarding Project Proposals Investment Projects (000,00 TL) Project 1 Engine and Transmission Casting Line Revision Project 2 Engine and Transmission Assembly Line
Net Cash Flows Regarding Project Proposals
Investment Projects (000,00 TL) | Project 1 Engine and Transmission Casting Line Revision | Project 2 Engine and Transmission Assembly Line Revision | 3. Alloy R&D Laboratory Establishment | 4. From Alloy R&D Laboratory Procurement of services |
Years | ||||
0 | - 500.000 | - 240.000 | - 120.000 | - 60.000 |
1 | 45.000 | 30.000 | 10.000 | 0 |
2 | 60.000 | 40.000 | 10.000 | 0 |
3 | 70.000 | 46.500 | 10.000 | 0 |
4 | 80.000 | 60.000 | 10.000 | 0 |
5 | 100.000 | 70.000 | 10.000 | 0 |
6 | 100.000 | 70.000 | 15.000 | 0 |
7 | 100.000 | 75.000 | 15.000 | 0 |
8 | 100.000 | 75.000 | 15.000 | 0 |
9 | 100.000 | 75.000 | 15.000 | 0 |
10 | 100.000 | 75.000 | 15.000 | 0 |
* Motorlu Araclar A.Ş. does not have enough equity to be transferred to the said investments and will only be able to afford the first two projects. Equity cost is 18%.
* It will be necessary to use foreign resources for the third and fourth projects. The interest rate to be applied for the foreign resource will be 20% and will be repaid in equal installments over a 5-year term.
* In all project proposals, the entire investment amount is subject to depreciation and the economic life is 6 years, the weighted depreciation rate is 15%.
* In accordance with the incentive provisions in practice, the corporate tax rate to which the company will be subject will be 20%. * Among these projects, the third project, the Alloy R&D Laboratory Establishment Project, and the fourth project, the Alloy R&D Service Procurement Project, are alternative projects.
) Calculate the depreciation expenses related to the project proposals and show them in the table.
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Fundamentals of Corporate Finance
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
8th Edition
978-0073530628, 978-0077861629
