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!
Restatement of investment appraisal
In the following solution the tax allowances in relation to the initial outlay on equipment are evaluated separately. Other approaches are adequate. The tax-adjusted cost of the capital expenditure is able to be found by deducting the present value of the tax savings generated by exploiting the writing-down allowance from the initial outlay. It is supposed that the available allowances can be set off against profits immediately that is beginning in the financial year in which the acquisition of the asset occurs. This acquiesce five sets of WDAs as the project straddles five tax years. The solution presumes no scrap values.
Present value of tax savings = 178 i.e., $178000
The effective cost of the equipment is as
[Nominal outlay - present value of tax savings]
= [$900,000 - $178,000]
= $722,000.
The cash flow profile is as
NPV = + 357 i.e., $357000
Recommendation
Therefore the equipment purchase is acceptable and should be undertaken although an analysis of its risk is as well recommended.
Question 1: (a) Explain fully the following financial accounting techniques: i. Cash accounting ii. Accrual accounting iii. Fund accounting iv. B
Manage a project or clearly defined piece of work from beginning to end. This may include setting up a budgetary system.
Your task is to determine CDW's current cost of equity. Since the company is not yet publicly traded , you need to estimate its cost of equity from a set of comparable companies. U
In January 2010 your firm bought from an Italian firm goods payable in Euros worth EU2,000,000. Suppose that at that time the exchange rate of the Euros was 1EU=$1.25. Because th
Explain the Difference between cash and profit Cash flow statement shows all the cash in and cash out for the organisation for that period. It demonstrates the cash generating
Q. Explain Net Present Value Method? Net Present Value (NPV) Method: - This process measures the Present value of returns per rupee invested. In this method present value of
The attached file (MFR & FFM Ass Returns Data.xls) gives 132 months returns for thirty securities drawn from the FT ALL share index as well as the returns on the FT ALL share index
To understand how treasury spot rates are used to calculate the arbitrage-free value of the treasury security, we will take imaginary treasury spot rates (given i
Why do businesses spend time, effort, and money to produce forecasts? Explain. Businesses succeed or fail relies on how well organized they are to deal with the situations they
Explain the term- Market penetration A strategy which pursues to increase sales of existing services or products to the same market. Price reduction strategies Aggre
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd