Description
FIN3701 Assignment 1 Semester 1 | Due 31 March 2025. Step by step calculations done.
QUESTION 1 [12 marks] Mphoreng Industries is considering replacing its existing machine, which was purchased three years ago at a cost of R1 million. The machine is depreciated at 30% per annum and can be sold today at R900 000. The new machine will cost R700 000 with R20 000 installation cost and R5 000 transportation costs. The use of the new machine will decrease the working capital with R8 000. Assume a 40% capital gains tax per annum.
REQUIRED:
1.1 Calculate the book value of the existing machine. Show all calculations. (3 marks)
1.2 Calculate the tax implication ……….. ALL QUESTIONS ARE ANSWERED!
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