The NUBD Co. is planning to purchase a new machine for P300,000. The payback period is expected to be five years. The new machine is expected to produce cash flow from operations, net of income taxes, of P70,000 a year in each of the next three years and P50,000 in the fourth year. Depreciation of P50,000 a year will be charged to income for each of the five years of the payback period. What is the amount of cash flow from operations, net of taxes, that the new machine is expected to produce in the last (fifth) year of the payback period?
The NUBD Co. is planning to purchase a new machine for P300,000. The payback period is expected to be five years. The new machine is expected to produce cash flow from operations, net of income taxes, of P70,000 a year in each of the next three years and P50,000 in the fourth year. Depreciation of P50,000 a year will be charged to income for each of the five years of the payback period. What is the amount of cash flow from operations, net of taxes, that the new machine is expected to produce in the last (fifth) year of the payback period?
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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The NUBD Co. is planning to purchase a new machine for P300,000. The payback period is expected to be five years. The new machine is expected to produce cash flow from operations, net of income taxes, of P70,000 a year in each of the next three years and P50,000 in the fourth year.
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