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Bonka Toys is planning to buy a robot costing $75,000.

After 5 years its salvage value will be $18,000.

An overhaul costing $10,000 will be needed in Year 3.

Operations and Maintenance costs will be $2000 per year.

What is the cash flow stream for using this robot?

Respuesta :

ijaz4308

Answer:

Please see explanation

Explanation:

The cash flow stream of Bonka Toys can be calculated using the following way:

                            Year 0          Year 1      Year 2     Year 3     Year 4    Year 5    

Robot                ($75,000)

Salvage value                                                                                          $18,000

Overhaul cost                                                           ($10,000)

Oper and maint                     ($2000)    ($2000)    ($2000)    ($2000)  ($2000)

Cash flows        ($75,000)     ($2000)   ($2000)    ($12,000)   ($2000)  $16,000  

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