Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Investment appraisal
- This topic has 1 reply, 2 voices, and was last updated 1 year ago by
LMR1006.
- AuthorPosts
- May 3, 2024 at 6:48 am #704862
Juicy Co is considering investing in a new Industrial juicer for use on a new contract. It will cost $150,000 and will last 2 years. Juicy Co pays corporation tax at 30% (as the cash flows occur) and, due to the health benefits of juicing, the machine attracts 100% tax- allowable depreciation immediately. – To Given a cost of capital of 10%, what is the minimum value of the pre-tax contract revenue receivable in two years which would be required to recover the net cost of the juicer sir similar question you have done before but at a time you consider about after tax revenue 0.7R but in this question they are talking about the pre tax revenue i didn’t get it could you explain sir…..
May 3, 2024 at 8:12 pm #704903The question is asking for the minimum value of the pre-tax contract revenue receivable in two years that would be required to cover the net cost of the juicer.
In this case, the pre-tax revenue refers to the revenue before any taxes are deducted.
- AuthorPosts
- You must be logged in to reply to this topic.