Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Taxes are costs, and, therefore, changes in tax rates can affect consumer prices, project lives and the value of existing firms. Evaluate the change in taxation on the valuation of the following project:
1
2
3
1.Initial Investment
100
2. Revenues
3. Cash operating costs
50
4. Tax depreciation
33.33
S. Income pretax
16.67
6. Tax at 40%
6.67
7. Net income
10
8. After-tax salvage
15
9. Cash flow (7 + 8 + 4
- 1)
-100
+43.33
+58.33
NPV at 20%. 0
Assumptions: Tax depreciation is straight-line over three years. Pre-tax salvage value is 25 in year 3 and 50 if the asset is scrapped in year 2. Tax on salvage value is 40% of the difference between salvage value and book value of the investment. The cost of capital is 20%
Question 1: verify that the information given above yields NPV = 0.
Question 2: If you decide to terminate the project in year two (2) what would be the NPV of the project?
Question 3: Suppose that the government now changes tax depreciation to allow a 100% write-off in year one (1). How does this affect your answers to parts a and b above?
Question 4: Would it now make sense to terminate the project after two rather than three years?
Question 5: How would your answers change if the corporate income tax were abolished entirely?
Financial Statement Analysis and Preparation
Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?
An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.
Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.
This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited
Prepare general journal entries for Goela Ltd
Prepare the journal entry to record the acquisition of the assets.
Prepare general journal entries to record the transactions, assuming use of the periodic inventory system
Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.
Explain the IASB Conceptual Framework's perspective of users and their decisions.
T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
Computation of Free Cash Flow
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd