DGE purchased a cement truck for $120,000. It is expected to last N=4 years. The $120,000 was borrowed from the bank at 10% interest per year compounded annually and payments are paid annually from DGE to the bank. The loan will be fully repaid in 4 years. CCA rate is 35%. Tax Rate is 40%. Answer the following questions with regards to Income Statements and Cash Flow Statements. Develop the cash flow/ investment including as many details as possible. What is the net cash flow over 6 years a. If there were working capital (WC) required for this project, which year or years does it show up in the statement(s)?
DGE purchased a cement truck for $120,000. It is expected to last N=4 years. The $120,000 was borrowed from the bank at 10% interest per year compounded annually and payments are paid annually from DGE to the bank. The loan will be fully repaid in 4 years. CCA rate is 35%. Tax Rate is 40%. Answer the following questions with regards to Income Statements and Cash Flow Statements. Develop the cash flow/ investment including as many details as possible. What is the net cash flow over 6 years a. If there were working capital (WC) required for this project, which year or years does it show up in the statement(s)?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...
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DGE purchased a cement truck for $120,000. It is expected to last N=4 years. The $120,000 was borrowed from the bank at 10% interest per year compounded annually and payments are paid annually from DGE to the bank. The loan will be fully repaid in 4 years. CCA rate is 35%. Tax Rate is 40%. Answer the following questions with regards to Income Statements and Cash Flow Statements. Develop the cash flow/ investment including as many details as possible. What is the net cash flow over 6 years
a. If there were working capital (WC) required for this project, which year or years does it show up in the statement(s)?
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