These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: All mentioned...
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These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: ● All mentioned machinery qualifies for a section 12C wear-and-tear deduction in terms of the Income Tax Act and are considered new machinery, except for PP, which was purchased second-hand. . EveryWear's depreciation policy for the entity's machinery is 4 years on the straight-line basis. The South African Income Tax rate is 28% for companies. The upcoming change in the Income Tax rate to 27% should be ignored for the entire question. Any wear-and-tear allowances on the buildings may be ignored. Section 11(o) of the Income Tax Act is elected where applicable. Any Capital Gains Tax consequences may be ignored. VAT may be ignored. EveryWear's current weighted average cost of capital ("WACC") is 11.2%. Inflation is expected to rise from the current rate of 4.5% to 5% after three years' time from today. All above amounts (except when stated otherwise) are at current prices. Nominal cash flows are to be used in the evaluations. ● ● ● ● ● ● ● ● Required: Advise EveryWear Ltd. whether Machine P512 or Machine X4LK should be obtained. Separately for Machine P512 and Machine X4LK, make use of the following methods and calculations to substantiate your answer. Show ALL workings clearly. Net Present Value of net cash flows. Internal Rate of Return and Equivalent Annual Annuities methods ● 64 . Financial considerations (calculations) -82 marks Discussion - 3 marks (85 marks) HFMN331-1-Jul-Dec2022-FA1-V3-ES-28062022 These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: ● All mentioned machinery qualifies for a section 12C wear-and-tear deduction in terms of the Income Tax Act and are considered new machinery, except for PP, which was purchased second-hand. . EveryWear's depreciation policy for the entity's machinery is 4 years on the straight-line basis. The South African Income Tax rate is 28% for companies. The upcoming change in the Income Tax rate to 27% should be ignored for the entire question. Any wear-and-tear allowances on the buildings may be ignored. Section 11(o) of the Income Tax Act is elected where applicable. Any Capital Gains Tax consequences may be ignored. VAT may be ignored. EveryWear's current weighted average cost of capital ("WACC") is 11.2%. Inflation is expected to rise from the current rate of 4.5% to 5% after three years' time from today. All above amounts (except when stated otherwise) are at current prices. Nominal cash flows are to be used in the evaluations. ● ● ● ● ● ● ● ● Required: Advise EveryWear Ltd. whether Machine P512 or Machine X4LK should be obtained. Separately for Machine P512 and Machine X4LK, make use of the following methods and calculations to substantiate your answer. Show ALL workings clearly. Net Present Value of net cash flows. Internal Rate of Return and Equivalent Annual Annuities methods ● 64 . Financial considerations (calculations) -82 marks Discussion - 3 marks (85 marks) HFMN331-1-Jul-Dec2022-FA1-V3-ES-28062022 These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: ● All mentioned machinery qualifies for a section 12C wear-and-tear deduction in terms of the Income Tax Act and are considered new machinery, except for PP, which was purchased second-hand. . EveryWear's depreciation policy for the entity's machinery is 4 years on the straight-line basis. The South African Income Tax rate is 28% for companies. The upcoming change in the Income Tax rate to 27% should be ignored for the entire question. Any wear-and-tear allowances on the buildings may be ignored. Section 11(o) of the Income Tax Act is elected where applicable. Any Capital Gains Tax consequences may be ignored. VAT may be ignored. EveryWear's current weighted average cost of capital ("WACC") is 11.2%. Inflation is expected to rise from the current rate of 4.5% to 5% after three years' time from today. All above amounts (except when stated otherwise) are at current prices. Nominal cash flows are to be used in the evaluations. ● ● ● ● ● ● ● ● Required: Advise EveryWear Ltd. whether Machine P512 or Machine X4LK should be obtained. Separately for Machine P512 and Machine X4LK, make use of the following methods and calculations to substantiate your answer. Show ALL workings clearly. Net Present Value of net cash flows. Internal Rate of Return and Equivalent Annual Annuities methods ● 64 . Financial considerations (calculations) -82 marks Discussion - 3 marks (85 marks) HFMN331-1-Jul-Dec2022-FA1-V3-ES-28062022 These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: ● All mentioned machinery qualifies for a section 12C wear-and-tear deduction in terms of the Income Tax Act and are considered new machinery, except for PP, which was purchased second-hand. . EveryWear's depreciation policy for the entity's machinery is 4 years on the straight-line basis. The South African Income Tax rate is 28% for companies. The upcoming change in the Income Tax rate to 27% should be ignored for the entire question. Any wear-and-tear allowances on the buildings may be ignored. Section 11(o) of the Income Tax Act is elected where applicable. Any Capital Gains Tax consequences may be ignored. VAT may be ignored. EveryWear's current weighted average cost of capital ("WACC") is 11.2%. Inflation is expected to rise from the current rate of 4.5% to 5% after three years' time from today. All above amounts (except when stated otherwise) are at current prices. Nominal cash flows are to be used in the evaluations. ● ● ● ● ● ● ● ● Required: Advise EveryWear Ltd. whether Machine P512 or Machine X4LK should be obtained. Separately for Machine P512 and Machine X4LK, make use of the following methods and calculations to substantiate your answer. Show ALL workings clearly. Net Present Value of net cash flows. Internal Rate of Return and Equivalent Annual Annuities methods ● 64 . Financial considerations (calculations) -82 marks Discussion - 3 marks (85 marks) HFMN331-1-Jul-Dec2022-FA1-V3-ES-28062022 These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: ● All mentioned machinery qualifies for a section 12C wear-and-tear deduction in terms of the Income Tax Act and are considered new machinery, except for PP, which was purchased second-hand. . EveryWear's depreciation policy for the entity's machinery is 4 years on the straight-line basis. The South African Income Tax rate is 28% for companies. The upcoming change in the Income Tax rate to 27% should be ignored for the entire question. Any wear-and-tear allowances on the buildings may be ignored. Section 11(o) of the Income Tax Act is elected where applicable. Any Capital Gains Tax consequences may be ignored. VAT may be ignored. EveryWear's current weighted average cost of capital ("WACC") is 11.2%. Inflation is expected to rise from the current rate of 4.5% to 5% after three years' time from today. All above amounts (except when stated otherwise) are at current prices. Nominal cash flows are to be used in the evaluations. ● ● ● ● ● ● ● ● Required: Advise EveryWear Ltd. whether Machine P512 or Machine X4LK should be obtained. Separately for Machine P512 and Machine X4LK, make use of the following methods and calculations to substantiate your answer. Show ALL workings clearly. Net Present Value of net cash flows. Internal Rate of Return and Equivalent Annual Annuities methods ● 64 . Financial considerations (calculations) -82 marks Discussion - 3 marks (85 marks) HFMN331-1-Jul-Dec2022-FA1-V3-ES-28062022 These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: ● All mentioned machinery qualifies for a section 12C wear-and-tear deduction in terms of the Income Tax Act and are considered new machinery, except for PP, which was purchased second-hand. . EveryWear's depreciation policy for the entity's machinery is 4 years on the straight-line basis. The South African Income Tax rate is 28% for companies. The upcoming change in the Income Tax rate to 27% should be ignored for the entire question. Any wear-and-tear allowances on the buildings may be ignored. Section 11(o) of the Income Tax Act is elected where applicable. Any Capital Gains Tax consequences may be ignored. VAT may be ignored. EveryWear's current weighted average cost of capital ("WACC") is 11.2%. Inflation is expected to rise from the current rate of 4.5% to 5% after three years' time from today. All above amounts (except when stated otherwise) are at current prices. Nominal cash flows are to be used in the evaluations. ● ● ● ● ● ● ● ● Required: Advise EveryWear Ltd. whether Machine P512 or Machine X4LK should be obtained. Separately for Machine P512 and Machine X4LK, make use of the following methods and calculations to substantiate your answer. Show ALL workings clearly. Net Present Value of net cash flows. Internal Rate of Return and Equivalent Annual Annuities methods ● 64 . Financial considerations (calculations) -82 marks Discussion - 3 marks (85 marks) HFMN331-1-Jul-Dec2022-FA1-V3-ES-28062022 These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: ● All mentioned machinery qualifies for a section 12C wear-and-tear deduction in terms of the Income Tax Act and are considered new machinery, except for PP, which was purchased second-hand. . EveryWear's depreciation policy for the entity's machinery is 4 years on the straight-line basis. The South African Income Tax rate is 28% for companies. The upcoming change in the Income Tax rate to 27% should be ignored for the entire question. Any wear-and-tear allowances on the buildings may be ignored. Section 11(o) of the Income Tax Act is elected where applicable. Any Capital Gains Tax consequences may be ignored. VAT may be ignored. EveryWear's current weighted average cost of capital ("WACC") is 11.2%. Inflation is expected to rise from the current rate of 4.5% to 5% after three years' time from today. All above amounts (except when stated otherwise) are at current prices. Nominal cash flows are to be used in the evaluations. ● ● ● ● ● ● ● ● Required: Advise EveryWear Ltd. whether Machine P512 or Machine X4LK should be obtained. Separately for Machine P512 and Machine X4LK, make use of the following methods and calculations to substantiate your answer. Show ALL workings clearly. Net Present Value of net cash flows. Internal Rate of Return and Equivalent Annual Annuities methods ● 64 . Financial considerations (calculations) -82 marks Discussion - 3 marks (85 marks) HFMN331-1-Jul-Dec2022-FA1-V3-ES-28062022 These net operating profits exclude the other mentioned expenses (including depreciation). Additional Information: ● All mentioned machinery qualifies for a section 12C wear-and-tear deduction in terms of the Income Tax Act and are considered new machinery, except for PP, which was purchased second-hand. . EveryWear's depreciation policy for the entity's machinery is 4 years on the straight-line basis. The South African Income Tax rate is 28% for companies. The upcoming change in the Income Tax rate to 27% should be ignored for the entire question. Any wear-and-tear allowances on the buildings may be ignored. Section 11(o) of the Income Tax Act is elected where applicable. Any Capital Gains Tax consequences may be ignored. VAT may be ignored. EveryWear's current weighted average cost of capital ("WACC") is 11.2%. Inflation is expected to rise from the current rate of 4.5% to 5% after three years' time from today. All above amounts (except when stated otherwise) are at current prices. Nominal cash flows are to be used in the evaluations. ● ● ● ● ● ● ● ● Required: Advise EveryWear Ltd. whether Machine P512 or Machine X4LK should be obtained. Separately for Machine P512 and Machine X4LK, make use of the following methods and calculations to substantiate your answer. Show ALL workings clearly. Net Present Value of net cash flows. Internal Rate of Return and Equivalent Annual Annuities methods ● 64 . Financial considerations (calculations) -82 marks Discussion - 3 marks (85 marks) HFMN331-1-Jul-Dec2022-FA1-V3-ES-28062022
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Machine P512 NPV Calculation 1 Purchase price of machine R1200000 2 Wearandtear deduction per year 20 of R1200000 R240000 3 Net operating profit per y... 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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