Homework Answers
| 4 years | ||
| Payback period = | Original Cost/Annual Cash Flows | |
| Initial Investment = | 1,560,000 | |
| Cash inflows = | Profit after tax plus Depreciation | |
| Profit before tax | 270,400 | |
| Less: Tax 25% | 67,600 | |
| Profit after tax | 202,800 | |
| Add: Depreciation | 187,200 | |
| Annual Cash inflows | 390,000 | |
| Payback period = 1,560,000/390,000 = 4 years | ||
| Note: Depreciation = 1,560,000 x 12/100 = 187,200 | ||
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4 RSGUDUSES RS 1,JUUUU, Droiter cost Rs.15,60,000 and yields annually a profit of Rs.2.70.400 after depreciation...
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Problem 11-4
Whispering Winds Tool Corp. records depreciation annually at the
end of the year. Its policy is to take a full year’s depreciation
on all assets that are used throughout the year and depreciation
for half a year on all machines that are acquired or disposed of
during the year. The depreciation rate for the machinery is 10%,
applied on a straight-line basis, with no estimated scrap or
residual value.
The balance of the Machinery account at the beginning...
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Problem 11-4
Whispering Winds Tool Corp. records depreciation annually at the
end of the year. Its policy is to take a full year’s depreciation
on all assets that are used throughout the year and depreciation
for half a year on all machines that are acquired or disposed of
during the year. The depreciation rate for the machinery is 10%,
applied on a straight-line basis, with no estimated scrap or
residual value.
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