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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%
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 yearStep by Step Solution
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