The equipment generated PHP100 million sales in 2021, its first year. It is expected to grow by 5%. The economic life of the equipment is only 6 years. Cash flows-to-sales ratio is 50%. Discount rate is 10%. Ignore taxes and salvage value. 1. How much is the expected total sales over the life of the equipment? 2. How much is the expected total cash inflows over the life of the equipment?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
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ISBN:9781337514835
Author:MOYER
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Chapter2: The Domestic And International Financial Marketplace
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The equipment generated PHP100 million sales in 2021, its first year. It is expected to grow by 5%. The economic life of the equipment is only 6 years. Cash flows-to-sales ratio is 50%. Discount rate is 10%. Ignore taxes and salvage value.

1. How much is the expected total sales over the life of the equipment?

2. How much is the expected total cash inflows over the life of the equipment?

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