first let us know the annual depreciation :
(purchase cost + installation -depreciation) / 5 years
=>(10,350,000+61,525-0) / 5 years.
=>$2,082,305.
calculation of yearly cash flows:
revenues | 4,580,000 |
less:costs | (1,150,000) |
less:depreciation | (2,082,305) |
income before tax | 1,347,695 |
less: tax @35% | (471,693.25) |
net income | 876,001.75 |
add:depreciation | 2,082,305 |
yearly cash flow | 2,958,306.75 |
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