Calculate the current value of the machine

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Reference no: EM131943372

The cost base of a machine is 100,000 dollars and the machine is expected to be fully functional for 5 years. The machine will provide a net income of 35,000 dollars in each of the 5 years. The machine will have no value by the end of the 5 year period. For the deprecation calculations, 150% declining balance method will be used. By using the fact that the income tax is 40% and minimum acceptable rate of return after 10% tax, calculate the current value of the machine.

Reference no: EM131943372

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