Assume that the company’s cost of capital and tax rate is 10% and 40% respectively. From the replacement plan, calculate:i) Net Present Value (NPV) Computation of Cash flow after taxParticularsold Machine Machine TKCMachine RMR(RM)(RM)(RM)Annual Revenue500000600000675000Annual Cost of defects800007600077600Annual Operating cost500005125052000Annual Maintenance cost ##400003940040800Net Amount330000433350504600Less: Depreciation4260032400Earning before Tax (EBT)390750472200Таx @ 40%156300188880Earning after Tax (EAT)234450283320Cash flow after tax= EAT+ Depreciation277050315720## Given : Quarterly Maintenance CostRM 10000So, Annual Maintenance CostRM 10000 x4RM 40000 Old Machine Machine TKC Machine RMRRevenue:Annual SalesRM 500,000 RM 600,000 RM 675,000Expenses:Annual cost of defects80,00076,00077,600Annual operating cost50,00051,25052,000Annual maintenance cost40,00039,40040,800Annnual depreciation42,60033,400Pretax income330,000390,750471,200Income tax132,000156,300188,480Net Income198,000234,450282,720Add: depreciation42,60033,400Add: disposal of old machine5,0005,000Annual net cash flowRM 198,000 RM 282,050 RM 321,120

Net present value of a machinery is the discounted value of net cash flow series that will happen in…

Old Machine Machine TKC Machine RMR Revenue: Annual Sales RM 500,000 RM 600,000 RM 675,000 Expenses: Annual cost of defects 80,000 76,000 77,600 Annual operating cost 50,000 51,250 52,000 Annual maintenance cost 40,000 39,400 40,800 Annnual depreciation 42,600 33,400 Pretax income 330,000 390,750 471,200 Income tax 132,000 156,300 188,480 Net Income 198,000 234,450 282,720 Add: depreciation 42,600 33,400 Add: disposal of old machine 5,000 5,000 Annual net cash flow RM 198,000 RM 282,050 RM 321,120

Old Machine Machine TKC Machine RMR Revenue: Annual Sales RM 500,000 RM 600,000 RM 675,000 Expenses: Annual cost of defects 80,000 76,000 77,600 Annual operating cost 50,000 51,250 52,000 Annual maintenance cost 40,000 39,400 40,800 Annnual depreciation 42,600 33,400 Pretax income 330,000 390,750 471,200 Income tax 132,000 156,300 188,480 Net Income 198,000 234,450 282,720 Add: depreciation 42,600 33,400 Add: disposal of old machine 5,000 5,000 Annual net cash flow RM 198,000 RM 282,050 RM 321,120

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 40P

See similar textbooks

Similar questions

Sunland Company had net income for 2021 of $2960000. Additional information is as follows: Depreciation of plant assets $1204000 Amortization of intangibles 244000 Increase in accounts receivable 418000 Increase in accounts payable 546000 Sunland's net cash provided by operating activities for 2021 was $4536000. $4280000. $2656000. $4408000.
Loss of 21300 is incurreed in selling (for cash) office qeuipment that cost 89000 and had accumulated depreciation of 22200, actual cash proceedsmust have been 1. 67700 2.88100 3.66800 4. 45500
This was my answer to number 1. Calculate the operating cash flow. OCF=EBIT + Depreciation- Tax Finding EBIT: Revenue – COGS – Operating Expense EBIT = $250,000 - $134,000 - $6,000 EBIT = $110,000 Therefore, OCF= $110,000 + $10,200 - $18,420 OCF= $101,780 Can you explain why you included the depreciation of $10,200 when calculating the EBIT in your answer?
Company’s reported current year profit is Rs. 70000 after incorporating the following:ParticularsAmountParticularsAmount Loss on Sale of Equipment9000Gain from sale of Assets40000 Premium on Redemption of Debentures1500Provision for Tax22000 Discount on issue of Debentures2000Dividend Income4000 Depreciation on Machinery20000Transfer to General Reserve5000 Depletion of Natural Resources10000Preliminary Expenses1000 Interim Dividend25000Profit on Revaluation2500 Loss on sale of Investment1000 Find out the Funds from Operations.
Determine the missing amount: cash$239,186;short term investment$353,700;acct receiv$504,944;inventory? Prepaid exp$83,259;total current asset$1,594927; property&equipment? what is the inventory amount and property& equipment amount?
Problem BPeter Senen Corporation provided the following account balances as of September 30, 2020: CashP112,000 Accumulated depreciationP 36,000Accounts Receivable64,000Accounts payable 40,000Finished Goods48,000Income tax payable9,000Work in process 36,000 Share Capital500,000Raw materials 52,000 Retained Earnings207,000Property and Equipment480,000The following transactions occurred during October:1. Materials purchased on account, P150,0002. Materials issued to production: direct materials- P90,000, Indirect materials- P10,000.3. Payroll for the month of October 2020 consisted of the following (also paid during the month):Direct labor P62,000Administrative salariesP16,000Indirect Labor 20,000Sales salaries 30,000Payroll deductions were as follows:Withholding taxes P19,800Phil health contributions P2,000SSS contributions 7,100HDMF contributions 2,0004. Employer contributions for the month were accrued:FactorySellingAdministrativeSSS contributionsP5,700P2,000P1,100Philhealth…
statement of cash flow 2019 GH¢’000 2018 GH¢’000 2017 GH¢’000 Cash flows from operating activities Profit before income tax 32,548 35,430 11,576 Adjustments for: - Depreciation 56,108 58,326 54,759 - Amortisation 1,185 971 563 - Loss/(profit) on disposal of property, plant and equipment 2,242 (9) (566) - Impairment charge 1,110 534 43 - Finance cost 19,579 19,392 30,724 - Finance income (2,245)…
statement of cash flow 2019 GH¢’000 2018 GH¢’000 2017 GH¢’000 Cash flows from operating activities Profit before income tax 32,548 35,430 11,576 Adjustments for: - Depreciation 56,108 58,326 54,759 - Amortisation 1,185 971 563 - Loss/(profit) on disposal of property, plant and equipment 2,242 (9) (566) - Impairment charge 1,110 534 43 - Finance cost 19,579 19,392 30,724 - Finance income (2,245)…
Use the information provided below to prepare the Cash Flow Statement of Chelsea Limited for the year ended 31 December 2021 using the answer template provided (see images) Additional information: (See images)¦ Selling and administrative expenses include depreciation as follows:Depreciation on buildings R96 000Depreciation on plant and machinery R160 000¦ There were purchases but no disposals of property, plant and equipment for the financial year ended 31 December2021.¦ Total dividends for the year ended 31 December 2021 and 31 December 2020 amounted toR288 000 and R388 000 respectively.¦ Inventories on 31 December 2019 amounted to R560 000.¦ All purchases and sales of inventories were on credit.¦ The number of shares in issue was 400 000.¦ Credit terms from creditors are 90 days.
Georgia Peach has the following information regarding the sale of its equipment: Sales price $8,000 Cost $25,000 Accumulated depreciation $19,000 Which of the following statements is true regarding how the above information would be reported on Georgia's statement of cash flows? Group of answer choices Loss on sale of plant asset will be $17,000 Gain on sale of plant asset will be $2,000 Depreciation expense will be $19,000 Cash received from sale of plant asset will be $25,000
G company has an increase in its net fixed assets of $800. Depreciation = $140. How much did the company spend on net fixed assets? A source or use of cash? $800, source $800, use $940, source $940, use
Please answer Part B and C. The following are answers from previous questions in case you need the below information. Operating Cash Flow: Operating Cash Flow (OCF)= Net Income + Depreciation – Increase in Working Capital. OCF=419,573+11,751-110,249= 321,075 Net Capital Spending: Net capital expenditures (NCE) = Fixed asset (current period) - Fixed asset (prior period) + depreciation (current period) NCE=258,251-261,779+11,751 =8,223 iii. Change in Net Working Capital Net Working Capital (NWC)= Current assets- current Liabilities Year 2019 : NWC =421,609-148,087 =273,522 Year 2020 : NMW= 550,572-166,801 =383,771 Change in Net Working Capital = 383,771-273,522=110,249 Sl.NO PARTICULARS AMOUNT EBIT + DEPRECIATION - TAXES = 597976+11751-178055= $ 431,672 ii] NET CAPITAL SPENDING: ENDING NET FIXED ASSETS - BEGINNING NET FIXED ASSETS + DEPRECIATION = 258251-261779+11751= $ 8223 iii] CHANGE IN NET WORKING…