Question

The managers of Insomniac, Inc. plan to manufacture engine blocks for classic cars from the 1960s. They expect to sell 250 blocks annually for the next 5 years. The necessary foundry and machining equipment will cost a total of Rs. 800,000 and will be depreciated on a straight-line basis to zero over the project's life. The firm expects to be able to sell the equipment for Rs. 150,000 at the end of 5 years. Labor and materials costs total Rs. 500 per engine block, fixed costs are Rs. 125,000 per year. Assume a 35 percent tax rate and a 12 percent discount rate. What is the expected after-tax cash flow to the firm when the equipment is sold in year five?
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Answer 1

Answer:

so 35% tax rate and 12 % discount rate the expected after test cash flow to the form when the requirement is sold in year 5