In: Finance
Cost of asset (80000+20000)
$100,000.00
less : 5 year Depreciation provided =
-$95,000.00
(20%+32%+19%+12%+12%)*100000
Book value
$5,000.00
Sale value
$15,000.00
Sale value is more than book value. So Capital gain = Sale Value -
book value=
$10,000.00
tax on capital gain (@ 40% of 9040)=
$4,000.00
Calculation of Terminal cash inflows
Sale proceeds from equipment
$15,000.00
less: Tax on capital gain of sale of asset
-$4,000.00
Decline of working capital
$5,000.00
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Terminal cash inflow is $16,000.00
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