The clumsy corp are planning to implement a new project


The Clumsy Corp are planning to implement a new project which has a life span of three years. To this end they have to invest in a new machine which costs 30K$, and which has a useful life of 3 years, and depreciates linearly. Other installation and start-up costs for this project add up to 9000$. However CLUMSY are also given a one-time tax incentive equal to 10% of the cost of the machine. After 3 years, the net disposal value of the machine is expected to generate annual cash inflows of respectively 50K$, 75K$, and 100K$, and cash outflows of respectively 10K$, 15K$ and 20K$ for three years. Required: If the marginal corporate tax rate for this project is 30% for incomes below 50K$ pa, and 40% for incomes exceeding 50K$ pa; calculate a)CFAT for the initial phase b)CFAT for each year of the operational phase c)CFAT for the termination phase d)Total revenue expected from this project.

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Financial Accounting: The clumsy corp are planning to implement a new project
Reference No:- TGS01211362

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