A company buys a production machine at a price of Rp. 70,000,000.00 and will be used for 5 years until the salvage value is zero. The gross income generated by this machine is Rp. 45,000,000.00 per year. Operating expenses for the first to fifth year are Rp. 15,000,000.00. p. 16,000,000.00, 17,000,000.00, Rp. 18,000,000.00, and Rp. 19,000,000.00 respectively. Income tax (T) is 34% and the MARR (i) is 8%. Calculate the NPV from the cash flow after-tax for the machine using the Double Declining Balance Method!
A company buys a production machine at a price of Rp. 70,000,000.00 and will be used for 5 years until the salvage value is zero. The gross income generated by this machine is Rp. 45,000,000.00 per year. Operating expenses for the first to fifth year are Rp. 15,000,000.00. p. 16,000,000.00, 17,000,000.00, Rp. 18,000,000.00, and Rp. 19,000,000.00 respectively. Income tax (T) is 34% and the MARR (i) is 8%. Calculate the NPV from the cash flow after-tax for the machine using the Double Declining Balance Method!
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Basic Tax and Depreciation
A company buys a production machine at a price of Rp. 70,000,000.00 and will be
used for 5 years until the salvage value is zero. The gross income generated by this
machine is Rp. 45,000,000.00 per year. Operating expenses for the first to fifth year
are Rp. 15,000,000.00. p. 16,000,000.00, 17,000,000.00, Rp. 18,000,000.00, and
Rp. 19,000,000.00 respectively. Income tax (T) is 34% and the MARR (i) is 8%.
Calculate the NPV from the cash flow after-tax for the machine using the Double
Declining Balance Method!
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