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.
What to do to maximise profits of the company If you want to maximise profits, there are only two methods to do it. Either you decrease your expenses (also known as costs) or y
There are three parts to this question. Please answer all parts. The Chicken Company, a company with headquarters in Switzerland, has a receivable of one million euro, which it wil
Q. Show the Supposition of MM Hypothesis? Supposition of MM Hypothesis:- (i) There are ideal capital markets. (ii) Investors act rationally. (iii) Information regardin
Operating profit margin Operating profit margin = (PBIT / Turnover) x 100% This is the ratio of operating profit to turnover or sales. A high operating profit margin is
In financial analysis, interpolation is used widely in: Determination of internal rate of return of a project. Finding out the yield to maturity (ytm)
Interlinkage in the Financial Markets - Common Features The interlinkage present in the financial markets is essentially due to the fact that all these markets are in the proce
The fundamental principle is that when a tree is used to value an on-the-run issue, the resulting value should be arbitrage free i.e., it should be equal to the o
A procedure that invented in the 1980s for evaluating the processes of a business to find strengths and weaknesses. Specially, activity-based management finds out areas where a bus
You have an investment capital of $1,000,000. You plan to invest a portion of this money in Treasury bonds and the remainder in a stock portfolio. Treasury bonds are expected to
Can a company have a default rate on its accounts receivable that is too low? Explain. A company could comprise a default rate on AR that would be referred too low if by liberal
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