Question: how do we get E 22 and E24, pls put a formula You are planning the purchase of a commercial building. The financial information on

how do we get E 22 and E24, pls put a formulaYou are planning the purchase of a commercial building. The financial information on this potential investment includes: 1. Projected ownership of 4 years. 2. Annual revenues before taxes of $150,000. 3. Annual expenses of $60,000. 4. Working Capital =$30,000. 4. Today's asking price for the project is $600,000 with an expected selling price of $750,000 in 4 years. 5. The Canadian income tax rate for this type of investment is assumed to be 50% (on profits before taxes, capital gains or losses, and on recaptured depreciation). 6. Buildings and equipment are to be depreciated using the DB method and a 20% depreciation rate. 7. The half-year rule applies. 8. Working capital =$30,000. 9. You will need a loan of $250,000 at a 10%(r) rate. 10. The loan repayment (LRP) schedule is: - LRP1 ( EOY 1)=10% - LRP22=25% - LRP3=25% - LRP4=40% 11. The annual inflation rate (f) is projected to be constant at 2.0%. 12. MARRs are - Before-taxes with inflation =12% without inflation (inflation-free) =10% - After-taxes with inflation =6% without inflation (inflation freo) =4%
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