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SIR WHAT IF THE PROJECT IS FOR EXAMPLE FOR 5 YERAS BUT THE MACHINE’S USEFUL LIFE IS FOR 7 YEARS(AT THE END OF 7 YEARS THERE ALSO IS A BALANCING ALLOWANCE)
I GUESS WE WILL INCLUDE THE WHOLE 7 YEARS IN APPRAISAL OF THIS PARTICULAR PROJECT AS IT IS A RELEVANT CASH FLOW FOR THE PROJECT SO WE WILL INCLUDE THE TAX BENEFIT AFTER 5 YEARS ALSO.
AM I RIGHT?so sir just for details, there is a question degnis co (march june 2016)
in it the first part asks for npv of first 4 years and machine useful life is 10 years
if for example instead of 4 years,the question only asked to calculate npv(without perpetuity), we would have included tad benefit for all 10 years while sales revenue for 4 years only …right?
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