Determine the annual net returns

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A company is planning to buy cleaning equipment that can reduce its wash service cost and other cash expenses by an average of P180,000 per year. The new cleaning equipment will cost P300,000 and will be depreciated for 5 years on a straight-line basis. No salvage value is expected at the end of the equipment's life. Income tax is estimated at 30% of income before tax.

Required:

Question 1: Determine the annual net returns (net income) and net cash inflows for the proposed investment.

Reference no: EM132546790

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