The initial investment in machinery would be $8 million immediately and the project is expected to last for three years. Investment in machinery receives tax allowable depreciation of 25% per annum on a straight-line basis. Allowances are receivable one year in arrears. The machinery will be sold at the end of the project for $5 million, in year 3 prices. And the answer is in the picture. How to calculate the answer of Tax Allowable depreciation?
The initial investment in machinery would be $8 million immediately and the project is expected to last for three years. Investment in machinery receives tax allowable depreciation of 25% per annum on a straight-line basis. Allowances are receivable one year in arrears. The machinery will be sold at the end of the project for $5 million, in year 3 prices. And the answer is in the picture. How to calculate the answer of Tax Allowable depreciation?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The initial investment in machinery would be $8 million immediately and the project is expected to last for three years.
Investment in machinery receives tax allowable
And the answer is in the picture. How to calculate the answer of Tax Allowable depreciation?
Transcribed Image Text:3.2000
3.4112
3.6342
Tax Allowable Depreciation @ 25% straight
-2.6667
-2.6667
-2.6667
line method
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