Given below cash flows details of a project: Period 0 1 2 3 4 5 Demand (in units) 40000 45000 42000 38000 30000 Initial Investment in million -100 Sales 40,000*1000)/1000000 40 45 42 38 30 Selling price per unit Rs. 1000 Variable cost per unit Rs. 300 per unit Fixed Cost Rs. 10 million Depreciation 25% written down value Resale price (in million) 110 100 90 50 30 Corporate tax rate 35%, capital gain tax 20% Required: You are required to estimate cash flows and decide the period in which project should be abandoned
Given below cash flows details of a project: Period 0 1 2 3 4 5 Demand (in units) 40000 45000 42000 38000 30000 Initial Investment in million -100 Sales 40,000*1000)/1000000 40 45 42 38 30 Selling price per unit Rs. 1000 Variable cost per unit Rs. 300 per unit Fixed Cost Rs. 10 million Depreciation 25% written down value Resale price (in million) 110 100 90 50 30 Corporate tax rate 35%, capital gain tax 20% Required: You are required to estimate cash flows and decide the period in which project should be abandoned
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
- Given below
cash flows details of a project:
Period |
0 |
1 |
2 |
3 |
4 |
5 |
Demand (in units) |
|
40000 |
45000 |
42000 |
38000 |
30000 |
Initial Investment in million |
-100 |
|
|
|
|
|
Sales 40,000*1000)/1000000 |
|
40 |
45 |
42 |
38 |
30 |
Selling price per unit Rs. 1000 |
|
|
|
|
|
|
Variable cost per unit Rs. 300 per unit |
|
|
|
|
|
|
Fixed Cost Rs. 10 million |
|
|
|
|
|
|
|
|
|
|
|
|
|
Resale price (in million) |
|
110 |
100 |
90 |
50 |
30 |
- Corporate
tax rate 35%, capital gain tax 20%
Required:
- You are required to estimate cash flows and decide the period in which project should be abandoned.
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