Bristol plc pays corporation tax at a rate of 25%. Tax is paid the year after...
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Bristol plc pays corporation tax at a rate of 25%. Tax is paid the year after each cash flow. Please complete the following • Calculate the tax cashflows Calculate the net cash flow for each year Calculate the Net Present Value of the investment Revenue Variable costs Fixed costs Net trading c/f Tax @ 25% Investment Disposal Capital allowances Net cash flows Cost of capital Year 0 (900,000) 15% Year 2 1,200,000 Year 1 1,000,000 (500,000) (600,000) (220,000) (240,000) 280,000 360,000 NPV 40,500 Year 3 1,500,000 (750,000) (260,000) 490,000 33,210 Year 4 1,800,000 (900,000) (280,000) 620,000 150,000 27,232 Year 5 86,558 Bristol plc pays corporation tax at a rate of 25%. Tax is paid the year after each cash flow. Please complete the following • Calculate the tax cashflows Calculate the net cash flow for each year Calculate the Net Present Value of the investment Revenue Variable costs Fixed costs Net trading c/f Tax @ 25% Investment Disposal Capital allowances Net cash flows Cost of capital Year 0 (900,000) 15% Year 2 1,200,000 Year 1 1,000,000 (500,000) (600,000) (220,000) (240,000) 280,000 360,000 NPV 40,500 Year 3 1,500,000 (750,000) (260,000) 490,000 33,210 Year 4 1,800,000 (900,000) (280,000) 620,000 150,000 27,232 Year 5 86,558
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Answer rating: 100% (QA)
To calculate the tax cash flows net cash flow for each year and the Net Present Value NPV of the inv... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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