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Terminal Ltd purchased a machine at R80 000 two years ago. This machine can be replaced with a new machine at a cost of R100
Terminal Ltd purchased a machine at R80 000 two years ago. This machine can be replaced with a new machine at a cost of R100 000. The new machine can be sold for R30 000 after completion of a 5-year project. The old machine can be sold for R15 000 today. The SARS capital allowance on both machines is calculated at 20% per year. Net working capital will decrease with R1 500 at the end of the project life. Assume a tax rate of 28%. What is the net cash flow of the project in year 5?
R20 100
R21 600
R30 000
R28 500
R8 400
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