How do I calculate earnings before debt and taxes and present value of cash inflows from this information:
The company plans to purchase a new piece of equipment (to be used over a six year period) for $320,000.
Cash Flow Depreciation
1 $120,000 $64,000
2 105,000 102,400
3 80,000 61,440
4 65,000 36,800
5 53,000 36,800
6 45,000 18,560
The firm has a 36 percent tax rate. Assuming depreciation is the only expense and based upon the cost of capital of 10%, more
Earnings before debt and taxes and present value of cash inflow?
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