Reference no: EM132867626

Question - You have been informed at the meeting of new projects that your Plant will receive the transfer of the lines of manufacture of ring binders located in Los Angeles, CA., it is estimated by senior management to bring the machine requires a total of 20 million pesos, its budget of expenses only allows to use only with half, that is, 10 million pesos, for which it is necessary to request a credit for the missing to complete the investment.

The life of the project is eight years and the residual value of the machinery and equipment is calculated at 4 million pesos, with straight-line depreciation and a sector tax rate of 30%, the supply of Credit from our Bank for the 10 million pending is received at an interest rate of 11% per year, that can be paid with the flows generated by the project. The corporate financiers condition the transfer to an annual yield of 15% and notify that the following income and expenses:

If the mortgage is with a uniform annual payment, determine:

1- The amount of the annual payment.

2- What is the amount of annual depreciation?

3- The taxable base in the first year to obtain the tax rate or the calculation of taxes (30%).

4- The net flow of the first and other years, including for year 8 the residual value.

5- Finally, make a flow chart.