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# Help!!!! Capital budgeting - npv method

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 Shobhit Jain 2nd Year Article [ Scorecard : 87] In NPV method, if in a particular project a machine is used and it has a resale value of 10000 which is equal to its written down value at end of last year then what will be the terminal value as per this method???? I mean do we consider this value of 10000 while calculating the Present Value of Cash Inflows??? sunitha balachandar ca final [ Scorecard : 205] Hi shobhit, Can u  post the question in detail? Shobhit Jain 2nd Year Article [ Scorecard : 87] Hi Sunitha Following are the relevant details of the question. X Ltd is considering an Investment Project of Rs1.5 Lakhs and it will have a scrap value of Rs 10000 at the end of 5 years. Transportation and installation charges are Rs 5000 and 25000 respectively. Also, a spare part inventory of Rs 10000 must be maintained (Scrap Value 60% of Initial cost after 5 years). The depreciation for 5 years is as follows: (Cost of Capital - 12%) Year 1 - 72000, Year 2 - 43200, Year 3 - 32400, Year 4 - 21600, Year 5 - 800 Tax for 5 years - Year 1 - 11200, Year 2 - 22720, Year 3 - 27040, Year 4 - 31360, Year 5 - 39680 sunitha balachandar ca final [ Scorecard : 205] Hi , Where is the cash inflows? Shobhit Jain 2nd Year Article [ Scorecard : 87] Hi Expected annual revenue is Rs 170000 and Labour and material and Maintainence expenses are estimated to be Rs 15000, Rs 50000 & Rs 5000 respectively. sunitha balachandar ca final [ Scorecard : 205] Hi, The sale value is the cash inflow and it should be included in finding the terminal cash inflow.For tax purpose the STCG will be zero since(sale value=WDV).correct me if i am wrong. Shobhit Jain 2nd Year Article [ Scorecard : 87] got it......thanks Sunitha

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