Solution-Depreciation and tax expected from the project

Depreciation and tax expected from the project

Reference no: EM131114010

Aqua ltd has a proposal for a project whose cost is Sh.50million and has an economic useful life of 5 years. It has a nil residual value. The earnings before depreciation and tax expected from the project are as follows:

Year Earnings before depreciation and tax

Sh.'000'

1 12000

2 15000

3 18000

4 20000

5 22000

The corporate tax rate is 30% and depreciation is on straight line basis.

Reference no: EM131114010

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Depreciation and tax expected from the project

Reference no: EM131114010

Reference no: EM131114010

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