Question
The economic life of the machine we purchased for 6,000,000 TL is 5 years, the depreciation method is linear, cost of capital is 20%, and
The economic life of the machine we purchased for 6,000,000 TL is 5 years, the depreciation method is linear, cost of capital is 20%, and the tax rate is 20%. The project (this machine) will have 0 TL salvage value after 5 years. We are informed that projected revenues for the next 5 years are 4,200,000 TL per year, variable costs are 25 percent of the projected revenue, projected fixed costs are 600,000 TL per year for the next 5 years. Accordingly, calculate the amount of revenues from a point of accounting and finance break-even analyses.
Please solve differently from two other solutions for the question. And do not forget to calculate accounting break-even analysis. Show the formulas down below please. I'll rate it. Thank you!
Cash Flows in years 1-5 Projected Accounting Break- Even Financial Break - Even Investment (Year 0) Initial Investment Revenues Costs Variable Costs Fixed Costs Depreciation Pretax Profit Tax (20%) Profit After Tax Cash Flow from Operations(CFFO)Step by Step Solution
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