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Nyambose Itd is evaluating a project. Projected profit for the first year of the project is as follows. The corporate tax rate is 28%
Nyambose Itd is evaluating a project. Projected profit for the first year of the project is as follows. The corporate tax rate is 28% Sales Cost of sales R 250 000 150 000 The machinery to be used in the project has a cost of R200 000 and an expected residual value of zero at the end of the four-year project life. The depreciation is included in the cost of sales, and the tax and accounting depreciation is identical. The company's WACC is 18% (a) What is the depreciation charge per year (2 marks) (b) What are the net cash flows for this project in year 0 (2 marks) (d) What is the NPV of this project marks) (c) What will be the net cash flows for this project in year 17 marks)
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a What is the depreciation charge per year The depreciation charge per year is calculated as follows Depreciation charge per year Cost of machinery Re...Get Instant Access to Expert-Tailored Solutions
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