Title FM Answer (4)-combined (1).pdf ✅

Dheera Test Series Powered by DHEERA Test Series [3] Visit us: www.dheeratests.com PART II Question 1. Computation of Annual Cash Flow after Tax Particulars Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Savings in Salaries 15,00,000 15,00,000 15,00,000 15,00,000 15,00,000 Reduction in Production Delays 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000 Reduction in Lost Sales 2,50,000 2,50,000 2,50,000 2,50,000 2,50,000 Gain due to Timely Billing 2,00,000 2,00,000 2,00,000 2,00,000 2,00,000 Salary to Computer Specialist [10,00,000] [10,00,000] [10,00,000] [10,00,000] [10,00,000] Maintenance and Operating Cost [payable in advance] [2,00,000] [1,80,000] [1,60,000] [1,40,000] [1,20,000] Depreciation [21 lakhs/5] [4,20,000] [4,20,000] [4,20,000] [4,20,000] [4,20,000] Gain Before Tax 6,30,000 6,50,000 6,70,000 6,90,000 7,10,000 Less: Tax [30%] 1,89,000 1,95,000 2,01,000 2,07,000 2,13,000 Gain After Tax 4,41,000 4,55,000 4,69,000 4,83,000 4,97,000 Add: Depreciation 4,20,000 4,20,000 4,20,000 4,20,000 4,20,000 Add: Maintenance and Operating Cost [payable in advance] 2,00,000 1,80,000 1,60,000 1,40,000 1,20,000 Less: Maintenance and Operating Cost [payable in advance] [2,00,000] [1,80,000] [1,60,000] [1,40,000] [1,20,000] - Net CFAT [2,00,000] 8,81,000 8,95,000 9,09,000 9,23,000 10,37,000 Note: Annual cash flows can also be calculated Considering tax shield on depreciation & maintenance and operating cost. There will be no change in the final cash flows after tax. Computation of NPV Particulars Year Cash Flows [₹] PVF PV [₹] Initial Investment [80% of 20 Lacs] 0 16,00,000 1 16,00,000 Installation Expenses 0 1,00,000 1 1,00,000 Instalment of Purchase Price 1 4,00,000 0.870 3,48,000 3.5 M Award full 3.5 marks only if all figures are correct; otherwise, allocate marks proportionately based on the number of correct values.