3.1) A company purchases a new printing press and determines the following cash items: Initial cost = R500 000 Annual revenue = R100 000 Annual maintenance = R50 000 Printing drum overhaul in year 4 = R100 000 Salvage value at the end of year 5 = R80 000 3.1.1) Sketch the cash flow diagram. 3.1.2) Determine the cash flow for end of year 3. 3.1.3) Determine in which year/s will a negative cash flow be experienced.

3.1) A company purchases a new printing press and determines the following cash items: Initial cost = R500 000 Annual revenue = R100 000 Annual maintenance = R50 000 Printing drum overhaul in year 4 = R100 000 Salvage value at the end of year 5 = R80 000 3.1.1) Sketch the cash flow diagram. 3.1.2) Determine the cash flow for end of year 3. 3.1.3) Determine in which year/s will a negative cash flow be experienced.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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