Q1(a) A company generates RM1,400,000 of gross income during its tax year and incurs operating expenses...

 

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Q1(a) A company generates RM1,400,000 of gross income during its tax year and incurs operating expenses of RM700,000. The total depreciation deductions for the tax year is RM114,000. Compute the taxable income of this firm. (4 marks) (b) Wajasetia Security company has received a contract to provide additional Eecurity for the outdoor theme park at Bangi Water World. They plan to propose a CCTV system equipment for use in the 11 -years contract. The equipment is expected to cost RM115,000. Assume the recovery period for this product is 5 years. () Calculate the annual depreciation amount and book value by ising 150% Decline Balance method. (6 marks) (ii) Refer to the result in Q1(b)(1), identify the book value at the end of year 3. (2 marks) (c) An oil company is planning to install a new 80 mm pipeline to connect storage tanks to a processing plant 1500 m away. The connection will be needed for the foreseeable future. Refer to their costs incurred below: initial cost: RM15, 000 service life: 12 years salvage value: RM200 one-off saving in year 8: RM 300 annual profit: RM400 annual pump operation hours: 450 hours pump cost per hours: RM2.50 Calculate the single project evaluation using Benefit Cost Ratio PW analysis method, which is preferred if the MARR is 7%. Draw the cashflow diagram. (8 marks) Q1(a) A company generates RM1,400,000 of gross income during its tax year and incurs operating expenses of RM700,000. The total depreciation deductions for the tax year is RM114,000. Compute the taxable income of this firm. (4 marks) (b) Wajasetia Security company has received a contract to provide additional Eecurity for the outdoor theme park at Bangi Water World. They plan to propose a CCTV system equipment for use in the 11 -years contract. The equipment is expected to cost RM115,000. Assume the recovery period for this product is 5 years. () Calculate the annual depreciation amount and book value by ising 150% Decline Balance method. (6 marks) (ii) Refer to the result in Q1(b)(1), identify the book value at the end of year 3. (2 marks) (c) An oil company is planning to install a new 80 mm pipeline to connect storage tanks to a processing plant 1500 m away. The connection will be needed for the foreseeable future. Refer to their costs incurred below: initial cost: RM15, 000 service life: 12 years salvage value: RM200 one-off saving in year 8: RM 300 annual profit: RM400 annual pump operation hours: 450 hours pump cost per hours: RM2.50 Calculate the single project evaluation using Benefit Cost Ratio PW analysis method, which is preferred if the MARR is 7%. Draw the cashflow diagram. (8 marks)

Answer rating: 100% (QA)

Answer 1C Year Initial Investment annual profit add annual depreciation 1500012 add salvage value on... View the full answer