- Today It Will Be Sold For R20 00 The New Machine Costing R130 000 Is Also Expected To Have A Life Of 4 Years With A Scr 1 (200.42 KiB) Viewed 63 times
- Today It Will Be Sold For R20 00 The New Machine Costing R130 000 Is Also Expected To Have A Life Of 4 Years With A Scr 2 (200.42 KiB) Viewed 63 times
today, it will be sold for R20,00 The new machine costing R130,000 is also expected to have a life of 4 years with a scrap value of R18,000. The new machine, due to its technological superiority, is expected to contribute additional annual benefit (before depreciation and tax) of R60,000. The new machine will be sold at its scrap value at the end of 4 years. (HINT: both machines are depreciating equally throughout their remaining lives). Calculate the relevant cash flows associated with this decision given that the tax rate applicable to the firm is 30%. (20) c) Your company is planning to borrow R1,000,000 on a 5-year, 15%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal? (10) d) You are thinking about buying a piece of art that costs R50,000. The art dealer is proposing