Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please answer(b) and explain it Exercise 2. Your proposed investment has forecast the following capital, sales and operating costs given below. Capital may be depreciated
please answer(b) and explain it
Exercise 2. Your proposed investment has forecast the following capital, sales and operating costs given below. Capital may be depreciated over 10 years on a straight line basis. Tax is assessed at 30 % of net profits after tax. The real discount factor is 5%. (a) Assuming a unit sale price of $AUD 1 per unit, determine: i. What is the tax payable in Year 3? Express as a single number. ii. What is the net after tax cash flow in Year 4? Express as a single number. iii. What is the NPV of this project? (b) What is the break-even price per unit? 0 1 2 3 4 to 25 Year Capital ($AUD) Annual sales (units sold) (60,000) 15,000 22,000 25,000 27,000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started