Page 323 - AFM Integrated Workbook STUDENT S18-J19
P. 323
Answers
(W1) Tax allowable depreciation (TAD)
$m
T 0 Purchase 2.000
TAD (25%) (0.500)
T 1
1.500
T 2 TAD (25%) (0.375)
1.125
T 3 TAD (25%) (0.281)
0.844
T 4 Sale proceeds 1.000
T 4 Balancing charge 0.156
(W2) Working capital (WC) investment
$m T 0 T 1 T 2 T 3 T 4
Net op CF 1.060 1.124 1.191 1.262
0
WC needed (25%) 0.265 0.281 0.298 0.316
(released)
Cash flow (0.265) (0.016) (0.017) (0.018) 0.316
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