If the interest rate is 7 per cent, what is the net present value of the net
Question:
If the interest rate is 7 per cent, what is the net present value of the net cash flows arising from the project in Question 46.4A?
Data fromQuestion 46.4A
The annual forecasted profit from a project is:
Equipment with a four-year useful economic life and no residual value will be purchased on 1 September for £60,000. £30,000 additional working capital, which will be recovered in full at the end of the four years, will be required from 1 September. A 25 per cent writing-down allowance will be available throughout the period of the project. Tax at 30 per cent will be payable on 1 June each year, nine months after the end of the company’s financial period on 31 August. Prepare a cash flow budget for the project.
Step by Step Answer:
Frank Woods Business Accounting Volume 2
ISBN: 9780273693109
10th Edition
Authors: Frank Wood, Alan Sangster