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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Investment appraisal
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…..
The 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.