[mktaguba]

Hi John,

The taxable cash flow for year 3 is 545. From what I understand, the 30% tax would be applicable to the year it relates to which means tax in year 3 should be 163.5 (545*0.3). Why is it 140 in the answer?

Thanks,

Maria

[mktaguba]

Thank you John!

[mktaguba]

Thank you John! 🙂

[mktaguba]

Hi John,

In the alternative approach, why was saved labour cost not included in the calculation?

An alternative approach is possible to the above problem:
Cash flow Ref Amount ($)
Lost contribution – TD Note 7 12,000
Lost contribution – other products Note 8 (71,000)
Redundancy and recruitment Note 4 above (3,700)
Lost discount Note 9 (19,000)
Sublet income 12,000
Supervisor Note 6 above 0

Thanks,

Maria

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