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Profit Before Tax | Document

   

Added on  2020-03-04

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YearProfit before taxTaxProfit after taxDepreciationCash flowsCumulative Cash flowsDiscounted cash flows @ 10%1100,000 50,000 50,000 40,000 90,000 90,000 81,818.18 2100,000 50,000 50,000 40,000 90,000 180,000 74,380.17 380,000 40,000 40,000 40,000 80,000 260,000 60,105.18 480,000 40,000 40,000 40,000 80,000 340,000 54,641.08 540,000 20,000 20,000 40,000 60,000 400,000 37,255.28 200,000 200,000 200,000400,000 1,270,000 308,199.89 (a)Payback period=2 + ((200000 - 180000)/ 80000)=2.25years(b)Average Annual profits=200,000 / 5= 40,000 Rate of return on original investment method=40,000 / 200,000=20.00%(c)Average Annual Return=200,000 / 5= 40,000 Average Investment=200,000 / 2= 100,000 Rate of return on average investment method=40,000 / 100,000
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