acc 3. A firm interested in investing in a new project that would cost 4 million L.E(4,000,000). The project has a life time of 6 years with a forecasted sales value givenbelow, it's operating cost = 70% of sales value and depreciation is assumed to becalculated using straight line method while the tax rate is 50%.Year1st2nd3rd9,000,0004,000,000 3,000,000Sales Value 6,000,000(Hint: Marketing cost = zero)5th2,000,000Calculate:a) Over the period of time involved, determine the yearly net profit after tax(net income) using an income statement.b) SRRI.

The income statement shows the profit of the company for the period in which revenues and expenses…

Answered: Over the period of time involved,…

Business

Accounting

Over the period of time involved, determine the yearly net profit after tax (net income) using an income statement.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 22E

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Question

acc

3. A firm interested in investing in a new project that would cost 4 million L.E
(4,000,000). The project has a life time of 6 years with a forecasted sales value given
below, it's operating cost = 70% of sales value and depreciation is assumed to be
calculated using straight line method while the tax rate is 50%.
Year
1st
2nd
3rd
9,000,000
4,000,000 3,000,000
Sales Value 6,000,000
(Hint: Marketing cost = zero)
5th
2,000,000
Calculate:
a) Over the period of time involved, determine the yearly net profit after tax
(net income) using an income statement.
b) SRRI.

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