No 18.

ABC Limited is considering to purchase a new machine which is worth $120,000 for their 3 year project. The machine has 2 year useful life for tax purposes. The tax rate is 30%. With the information provided below, choose the correct answers for the cash flow type, years to be included to our analysis as well as the amount to be included:

Information Cash flow type Which years) is(are) this cash flow to. How much to be included (apply

be included tax if applicable) N/A: Not applicable - N/A: Not applicable-NO

The cash flow is not included calculation needed

An increase in sales of $30,000 Before the project starts, $20,000 was spent on the research report to understand the market

Salary cost decreases from $70,000

to $50,000

The business has to pay $10,000

for interest expense throughout the

project life