yes but see you and the solution considered old machine and calculated its post tax SV(i.e. 250000*60%=150000) and then deducted it from salvage value of new machine while calculating initial cash outflow but in terminal cash flow also its SV is 35000 after 5 years and it is fully depreciated thus cRead more
yes but see you and the solution considered old machine and calculated its post tax SV(i.e. 250000*60%=150000) and then deducted it from salvage value of new machine while calculating initial cash outflow but in terminal cash flow also its SV is 35000 after 5 years and it is fully depreciated thus capital gain is of 35000 and after considering 40% of tax, its post tax SV is 21000 which shall be deducted from the salvage value of new machine but in the solution whole 35000 has been deducted from the SV of new machine…so this is my doubt why full value of old machine has been deducted and not its post tax SV as done in initial cash outflow
Leverage
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Please provide the link
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IRR and NPV are already calculated and given in this question. You just have to interpret them and answer the questions asked below.
IRR and NPV are already calculated and given in this question. You just have to interpret them and answer the questions asked below.
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yes but see you and the solution considered old machine and calculated its post tax SV(i.e. 250000*60%=150000) and then deducted it from salvage value of new machine while calculating initial cash outflow but in terminal cash flow also its SV is 35000 after 5 years and it is fully depreciated thus cRead more
yes but see you and the solution considered old machine and calculated its post tax SV(i.e. 250000*60%=150000) and then deducted it from salvage value of new machine while calculating initial cash outflow but in terminal cash flow also its SV is 35000 after 5 years and it is fully depreciated thus capital gain is of 35000 and after considering 40% of tax, its post tax SV is 21000 which shall be deducted from the salvage value of new machine but in the solution whole 35000 has been deducted from the SV of new machine…so this is my doubt why full value of old machine has been deducted and not its post tax SV as done in initial cash outflow
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Thank you sir!
Thank you sir!
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I have attached the full question with answer...please answer my query now.
I have attached the full question with answer…please answer my query now.
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