Tax

Does not replace

30% Discount
Year 0

Year 1

Depreciation
Depreciation tax shield (a)
Repair (AMC)
Repair (major)
Labor
Power
Total Expenses
Tax benefit (1+1+1+1)
After tax expense (b)
Work in progress (realization)
Free Cash Flow
Discount factor
PV
NPV

10%
Year 2

Year 3

120
36

120
36

120
36

-50

-50

-50

-50
15
-35

-800
-200
-1050
315
-735

-50
-250
-800
-200
-1300
390
-910

-800
-200
-1050
315
-735

-699
0.91
-636.09

-874
0.83
-725.42

-699
0.75
-524.25

-35
1
-35
-2435.76

Replaces
Year 0
Depreciation
Depreciation tax shield (a)
Repair (AMC)
Labor
Power
Total Expenses
Tax benefit (1+1+1)
After tax expense (b)
Work in progress (realization)
Sale of machine
Capital Loss tax adv.
Purchase of new machine
Scrap value of new machine
Free Cash Flow
Discount factor
PV
NPV

-100

-100
30
-70

Year 1

Year 2

Year 3

160
48

160
48

160
48

-100
-400
-300
-800
240
-560

-100
-400
-300
-800
240
-560

-100
-400
-300
-800
240
-560

-512
0.91
-465.92

-512
0.83
-424.96

-512
0.75
-384

200
500
30
-1000

-340
1
-340
-1865.08

Note: Error in expense amount: penalty = 2 marks as tax would be wrong but
error in tax or ignored tax effect of expenses:penalty = 1 (candidate gets marks it item value is cor

V1/50
Year 4

Year 5

Marks

120
36

120
36

-50

-800
-200
-1050
315
-735

-800
-200
-1000
300
-700
600

-699
-64
0.68
0.62
-475.32
-39.68
overall accuracy

Year 4

Remarks

2 2 or 0
1
1
1
1
4 1+1+1+1
(No cascading)
2 2 or 0

1 1 or 0

Year 5
160
48

160
48

-100
-400
-300
-800
240
-560

0
-400
-300
-700
210
-490
400

200
-512
158
0.68
0.62
-348.16
97.96
overall accuracy

marks it item value is correct)

2 2 or 0
1
1
1
3 1+1+1
(No cascading)
2 2 or 0
2 2 or 0
2 2 or 0
1
1

1 1 or 0
30

Tax
Does not replace

30% Discount
Year 0

Year 1

Depreciation tax shield (a)

After
After
After
After

Tax
Tax
Tax
Tax

Repair (AMC)
Repair (major)
Labor
Power

10%
Year 2

Year 3

36

36

36

-35

-35

-560
-140

-35
-175
-560
-140

-560
-140

-699
0.91
-636.09

-874
0.83
-725.42

-699
0.75
-524.25

-35

Work in progress (realization)

Free Cash Flow
Discount factor
PV
NPV

-35
1
-35
-2435.76

Replaces
Year 0

Year 1

Depreciation tax shield (a)

After Tax Repair (AMC)
After Tax Labor
After Tax Power

Work in progress (realization)

Sale of machine
Capital Loss tax adv.
Purchase of new machine
Scrap value of new machine
Free Cash Flow
Discount factor
PV
NPV

-70

Year 2

Year 3

48

48

48

-70
-280
-210

-70
-280
-210

-70
-280
-210

-512
0.91
-465.92

-512
0.83
-424.96

-512
0.75
-384

200
500
30
-1000

-340
1
-340
-1865.08

Note: Error in expense amount: penalty = 2 marks as tax would be wrong but
error in tax or ignored tax effect of expenses:penalty = 1 (candidate gets marks it item value is cor

V1/50
Year 4

Year 5

Remarks

36

36

-35

-560
-140

-560
-140

2 2 or 0
2 1+1
2 1+1
2 1+1
2 1+1

(tax)
(tax)
(tax)
(tax)

600

2 2 or 0

-699
-64
0.68
0.62
-475.32
-39.68
overall accuracy

1 1 or 0

Year 4

Year 5

48

48

-70
-280
-210

0
-280
-210

400

200
-512
158
0.68
0.62
-348.16
97.96
overall accuracy

marks it item value is correct)

2 2 or 0
2 1+1 (tax)
2 1+1 (tax)
2 1+1 (tax)

2 2 or 0
2 2 or 0
2 2 or 0
1
1

1 1 or 0
30

Tax
Does not replace

30% Discount
Year 0

Year 1

Depreciation
Depreciation tax shield (a)
Repair (AMC)
Repair (major)
Labor
Power
Total Expenses
Tax benefit (1+1+1+1)
After tax expense (b)
Work in progress (realization)
Free Cash Flow
Discount factor
PV
NPV

10%
Year 2

Year 3

120
36

120
36

120
36

-80

-80

-80

-80
24
-56

-800
-200
-1080
324
-756

-80
-250
-800
-200
-1330
399
-931

-800
-200
-1080
324
-756

-720
0.91
-655.2

-895
0.83
-742.85

-720
0.75
-540

-56
1
-56
-2523.33

Replaces
Year 0
Depreciation
Depreciation tax shield (a)
Repair (AMC)
Labor
Power
Total Expenses
Tax benefit (1+1+1)
After tax expense (b)
Work in progress (realization)
Sale of machine
Capital Loss tax adv.
Purchase of new machine
Scrap value of new machine
Free Cash Flow
Discount factor
PV
NPV

-100

-100
30
-70

Year 1

Year 2

Year 3

160
48

160
48

160
48

-100
-500
-300
-900
270
-630

-100
-500
-300
-900
270
-630

-100
-500
-300
-900
270
-630

-582
0.91
-529.62

-582
0.83
-483.06

-582
0.75
-436.5

200
500
30
-1000

-340
1
-340
-2130.38

Note: Error in expense amount: penalty = 2 marks as tax would be wrong but
error in tax or ignored tax effect of expenses:penalty = 1 (candidate gets marks it item value is cor

V2/80
Year 4

Year 5

Marks

120
36

120
36

-80

-800
-200
-1080
324
-756

-800
-200
-1000
300
-700
600

-720
-64
0.68
0.62
-489.6
-39.68
overall accuracy

Year 4

Remarks

2 2 or 0
1
1
1
1
4 1+1+1+1
(No cascading)
2 2 or 0

1 1 or 0

Year 5
160
48

160
48

-100
-500
-300
-900
270
-630

0
-500
-300
-800
240
-560
400

200
-582
88
0.68
0.62
-395.76
54.56
overall accuracy

marks it item value is correct)

2 2 or 0
1
1
1
3 1+1+1
(No cascading)
2 2 or 0
2 2 or 0
2 2 or 0
1
1

1 1 or 0
30

Tax
Does not replace

30% Discount
Year 0

Year 1

Depreciation tax shield (a)

After
After
After
After

Tax
Tax
Tax
Tax

Repair (AMC)
Repair (major)
Labor
Power

10%
Year 2

Year 3

36

36

36

-56

-56

-560
-140

-56
-175
-560
-140

-560
-140

-720
0.91
-655.2

-895
0.83
-742.85

-720
0.75
-540

-56

Work in progress (realization)

Free Cash Flow
Discount factor
PV
NPV

-56
1
-56
-2523.33

Replaces
Year 0

Year 1

Depreciation tax shield (a)

After Tax Repair (AMC)
After Tax Labor
After Tax Power

Work in progress (realization)

Sale of machine
Capital Loss tax adv.
Purchase of new machine
Scrap value of new machine
Free Cash Flow
Discount factor
PV
NPV

-70

Year 2

Year 3

48

48

48

-70
-350
-210

-70
-350
-210

-70
-350
-210

-582
0.91
-529.62

-582
0.83
-483.06

-582
0.75
-436.5

200
500
30
-1000

-340
1
-340
-2130.38

Note: Error in expense amount: penalty = 2 marks as tax would be wrong but
error in tax or ignored tax effect of expenses:penalty = 1 (candidate gets marks it item value is cor

V2/80
Year 4

Year 5

Remarks

36

36

-56

-560
-140

-560
-140

2 2 or 0
2 1+1
2 1+1
2 1+1
2 1+1

(tax)
(tax)
(tax)
(tax)

600

2 2 or 0

-720
-64
0.68
0.62
-489.6
-39.68
overall accuracy

1 1 or 0

Year 4

Year 5

48

48

-70
-350
-210

0
-350
-210

400

200
-582
88
0.68
0.62
-395.76
54.56
overall accuracy

marks it item value is correct)

2 2 or 0
2 1+1 (tax)
2 1+1 (tax)
2 1+1 (tax)

2 2 or 0
2 2 or 0
2 2 or 0
1
1

1 1 or 0
30

Tax
Does not replace

30% Discount
Year 0

10%
Year 1

Depreciation
Depreciation tax shield (a)

Year 2

Year 3

120
36

120
36

120
36
-80
-800
-200
-1080
324
-756

-720
0.75
-540

Repair (AMC)
Repair (major)
Labor
Power
Total Expenses
Tax benefit
After tax expense (b)
Work in progress (realization)

-80

-80

-80
24
-56

-800
-200
-1080
324
-756

-80
-250
-800
-200
-1330
399
-931

Free Cash Flow

Discount factor
PV
NPV

-56
1
-56

-720
0.91
-655.2

-895
0.83
-742.85

-2523.33

Replaces
Year 0

Depreciation
Depreciation tax shield (a)
Repair (AMC)
Labor
Power
Total Expenses
Tax benefit
After tax expense (b)

-100

-100
30
-70

Work in progress (realization)

Sale of machine
Capital Loss tax adv.
Purchase of new machine
Scrap value of new machine
Free Cash Flow
Discount factor
PV
NPV

Year 1

Year 2

Year 3

160
48

160
48

160
48

-100
-500
-300
-900
270
-630

-100
-500
-300
-900
270
-630

-100
-500
-300
-900
270
-630

-582
0.91
-529.62

-582
0.83
-483.06

-582
0.75
-436.5

200
500
30
-1000

-340
1
-340
-2130.38

Year 4

Year 5
120
36

120
36

-80

-800
-200
-1080
324
-756

-800
-200
-1000
300
-700
600

-720
0.68
-489.6

-64
0.62
-39.68

Year 4

Year 5

160
48

160
48

-100
-500
-300
-900
270
-630

0
-500
-300
-800
240
-560
400

200
-582
0.68
-395.76

88
0.62
54.56