Calculate the pay back period after tax cash flows, Cost Accounting

Assignment Help:

An investment alternative in a project requires a capital cost of $102 millions completed at time zero. The investment will produce a stream of revenue of $50 millions per year over a 6-year period with operating cost of $20 millions per year. General inflation is 5% and the rate of taxation is 40%. Assume an individual project basis for taxation in which the capital expenditure can be fully depreciated over the duration of the project on a straight-line base

Calculate :

(i) The annual after tax cash flows in a table after taking into account both taxation and inflation effects (in real/ constant dollars):

(ii) The pay back period - based on annual after tax cash flows. You do not need to calculate the PW values.


Related Discussions:- Calculate the pay back period after tax cash flows

Calculate the amount of annual investment return rates, Using the table bel...

Using the table below, calculate the amount of overall increase of your purchasing power over the period of 5 years given the annual investment return rates and annual inflation ra

Financially acceptable, Suppose that you are the chief financial officer at...

Suppose that you are the chief financial officer at Porter Memorial Hospital.  The CEO has asked you to analyze two proposed capital investment-Project X and Project Y.  Every proj

role in negotiated transfer prices, Price and Cost   information  play...

Price and Cost   information  play  no  role  in  negotiated  transfer  prices.  Do  you  agree? Describe.

Stores layout and location - material handling, Stores layout and location ...

Stores layout and location - Material Handling The layout of stores must ensure as a) For movement of material, ease of access out and in of stores b) The issue of peris

Prepare the entry to assign factory labor to production, The gross earnings...

The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer's payroll taxes for the factory payroll are 8,000. The fringe ben

Calculate the consumption ratios for each product, The activity driver for ...

The activity driver for the shipping activity is the number of orders shipped. Product A uses 20 orders and Product B uses 60 orders. Calculate the consumption ratios for each prod

Job Order Costing, Bedovin Company manufactures office tables and chairs us...

Bedovin Company manufactures office tables and chairs using the job order cost system

Group bonus plan, #question techniques of payment under group bonus plan ....

#question techniques of payment under group bonus plan .

Calculate the atm fee should the bank charge - marginal cost, A bank in a m...

A bank in a medium-sized midwestern city, Firm X, currently charges $1 per transaction at its ATMs.  To determine whether to raise price, the bank managers experimented with a n

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd