Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the approximate total amount of the cash flow in the final year of the project for Machine 2? Tax rate is 28% Details

What is the approximate total amount of the cash flow in the final year of the project for Machine 2?

Tax rate is 28%

image text in transcribed

Details of the investment opportunities: Data Anticipate sales volume (units) in year 1 Selling Price (expected to remain constant) Y. Expected revenue Expected annual sales growth rate Fixed costs of production (excl depreciation) p.a. Variable costs of production p.a. (% of Revenue) Projected increase in NWC (Yo only) Machine purchase cost Machine installation costs Expected useful life of machine Depreciation method Expected residual value Machine 1 100,000 $100 $10,000,000 10% $3,500,000 40% $500,000 $10,000,000 $500,000 5 years Straight line $0 Machine 2 100,000 $100 $10,000,000 10% $4,000,000 30% $600,000 $12,000,000 $600,000 5 years Straight line $0 All cash flows should be assumed to occur at the end of each financial year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance

Authors: Laurence S. Seidman

1st Edition

0073375748, 978-0073375748

More Books

Students also viewed these Finance questions