Tax Assignment Solution


You are the financial manager for a company that produces cars. Currently you only produce sedans and hatchbacks. However,your manager has come to you with a proposal to produce a cheap four wheel drive model to broaden the customer base and ultimately make the company more money. It is estimated that the project willlast for 10 years. Your job is to decide whether the project is a good option to take. Information important for your decision is”


Given information:

Number of sellable figures: 10000 units 1st year

Increments of 5% throughout the project of 10 years.

10000+5000 units

Market price of new model:  $28000

Price increment by 2% every year

Raw material: $6000 per unit

Labour cost: $4200 per unit

Factory cost: $100,000,000

After 10 years cost of factory will be $0

And return from land and scrap will be $500,000

Overhead cost: $25,000,000 per year

On introduction of new model, the decrement in sedan sale will be: 3000 unit per year

Price of each sedan: $35,000

Marketing cost every two years: $25,000,000

Tax: 35%

Cost of capital: 23%

Question 1: Evaluation Matrix

  1. Operating cash flow:

Operating Cash Flow = Operating Income (EBIT) + Depreciation – Taxes + Change in Working Capital.

As there is no such changes in work capital and it is meant to be constant so we can neglect that part.

So, we will focus on the main part with EBIT, depreciation and taxes.

Thus, putting things in prospective we have the following data derived from the given information:

For year 1: 25500000 – 9180000 – 10000000 = $26320000

For year 2: 4028000- 14500800- 10000000 = 35779200

For year 3: 462777600 – 16659936 -10000000 = $39617664

For year 4: 52395152 –18862254 -10000000 = $ 43532897.28

For year 5: 58635055 – 21108619 – 10000000= $ 47526435


For year 10: 91757215 – 33032597 – 10000000 = $ 68724617

  • Calculation of NPV:

Over a given time period, the net present value is the difference between the present value of your cash inflows and the present value of your cash withdrawals.

the project only has one cash flow, we can use the following net present value formula to calculate NPV:

NPV = Cash flow / (1 + i)t – initial investment.

However more simple way to think is:

NPV = Today’s value of the expected cash flows − Today’s value of invested cash

The NPV calculated for the project by multiplying cost capital percentage which is 23 % with the after-tax cash flows through out the project and summed with the original value of after-tax cash flow(initial investment in this case it is the factory).

NPV: $60373285.60

  • Calculation of IRR:

The internal rate of return, or IRR, is a tool for evaluating capital expenditures. The internal rate of return (IRR) is used to calculate the rate of return on the investment. Companies choose an end date and then use the IRR to calculate the percentage of profit or loss at that point in the project. IRR is calculated as a percentage rather than a monetary value. The IRR is a sophisticated statistic that is often used within the business community rather than as an external measure.

RR is expressed as a percentage. It offers the average rate of return on a project for the corporation over a set period of time.

The purpose of IRR is to calculate a project’s breakeven income level.

For calculation of IRR:

0 = NPV =ᵀC– C₀∑1 + IRRᵗᵗ⁼¹C = Net cash inflow during time period (t)

t = Time period

C₀ = Initial investment

The Internal rate of return calculated from this project is: 37.5018%

  • Calculation of Payback period:

The payback period calculator calculates how long it will take to recoup the cost of the investment. The following mathematical method may be used to calculate the payback period: Payback Period = Initial Investment / Annual Cash Flow

The payback period is calculated by sum of feasibility study + Capital expenditure + OCF + OCF 2nd year whole divided by OCF of 5th year + 2.

Thus we get: 2.961712432 that’s the period.

Question 2: Break Even Analysis

  1. Break even analysis of initial units

Break-even analysis is a financial tool that helps businesses determine the stage at which a business, new service, or product can be profitable. In other words, it is a financial calculation used by a company to determine how much of a good or service it must sell or provide to pay a cost (especially a fixed cost).

There is 5% increase in the units sold after one year which yields in 11550 units annually that is 450 units more than the first year.

Also, there is 2% inflation in price from 2nd year and applied year.

The expression used to calculate the breakeven number of initial units is :

(Initial units sold – The NPV of initial units sold)/ Sensitivity

Thus, final result is: 8775.759655

  • Calculation of breakeven price per unit:

Break-even pricing is a typical method used by most businesses to determine the price strategy for their product portfolio. It is computed by a company’s management in order to make educated decisions on whether to expand output or cut expenses. The corporation might opt to establish a price that is less than the break-even threshold. However, in such instance, the corporation would receive sales but not profits. As a result, rather than profit, the company’s primary goal would be to grow its market share. The majority of e-commerce businesses are still operating below their break-even point.

With change in revenue per unit with a rate of 2% per annum effective from 2nd year will yield by inflation rate thus the expression include: net revenue per unit + inflation amount on that year.

Thus the price goes on from 30000 to 30600 to 31212 to 31836.24 to 32472.96 till 35852.777.

  • Calculation of break even for raw material cost:

The break-even point is calculated as the percentage of units sold divided by the unit selling price minus the  variable cost per unit. The unit contribution is then divided by the fixed cost to give the number of units needed to sell  to cover the total fixed cost.

 Breakeven is a moving target. Due to various costs and changes in  prices, the amount required to pay the total cost will fluctuate over time.

And perhaps the raw material is a fixed cost and it has a different effect unlike variable costs.

After certain changes the break even for raw material changes to $3610.959

Which is given by the expression of Initial raw materials cost – NPV of the raw materials cost whole divided by sensitivity.

  • Calculation of break even labour cost:

Break even of the labour cost implies to variable cost as the cost of labour to manufacture a product varies with time as per economic situation of the respective country and the government policies.

 The labour cost changes to 4100 and remains the same over the year.

Perhaps the break even labour cost is given by the expression: (Initial labour costs per unit – The NPV of initial labour cost per unit)/ Sensitivity.

Which yields the amount : $ 1810.959251.

Question 3:

  1. FCF which stands for fresh cash flow. The income statement depreciation expenditure is not a real cash cost, but rather a distribution of value from long-ago bought property, plant, and equipment. To calculate the operational cash flow, add the depreciation cost back to the net income (after taxes). This methodology, by the way, is often indicated in the cash flow statement created using the indirect method of estimating cash flow, i.e. from net income adjusted for non-cash costs (depreciation, depletion, and amortisation) to appropriate operational cash flow. Actual cash collections and expenditures are used to calculate direct cash flow statements (which are more comprehensive).

Profit and cash flow are two very distinct ideas with quite different outcomes. Profit is a fairly limited term that only considers revenue and costs at a specific point in time. Cash flow, on the other hand, is a more fluid concept. It is concerned with the flow of funds into and out of a firm. More crucially, it is concerned with the moment at which the money is sent.

To be honest, the notion of cash flow is more realistic. If we utilise the accrual accounting system, knowing how to convert accrual profit to cash flow profit is useful.

Profit is the amount of income remaining after deducting the company’s expenses, and cash flow is the amount of money entering and leaving the company at any given time. Profit is the best indicator of a company’s performance, but cash flow is more important to day-to-day operations. Profitability has a long-term detrimental effect on cash flow.

  • Difference between Sensitivity analysis and scenario analysis

Risk assessment approaches include sensitivity analysis and scenario analysis. Organizations can use sensitivity analysis and scenario analysis before making an investment to determine what risk they can take.

 These strategies are critical to your business. Because, as we all know, the only certainty is that there is no certainty.

 Scenario Analysis and Sensitivity Analysis are analytical techniques that can help investors determine the scope of risks and potential rewards. The difference between the two is that sensitivity analysis examines the effect of changing one variable at a time.

 Scenario analysis evaluates the effect of changing all variables at the same time.

For this project sensitivity analysis is more beneficial as it is not a long term project like over 15+ years where different scenarios come up and we need to analyse the different scenario to predict the future of investments, while in this project of 10 years sensitivity scenario is beneficial because in sensitivity analysis it observes the single change in variable and thus helps use predict the near future rather not a bigger scenario.

Individual Component:

Question 1: A Column Graph

Question 1: B. Bust Case Column Graph

Question 2:

Results of analysis in the individual component compared to the pre-determined scenario of the project.

As we can see the both the column graphs, while focusing on the first graph we can estimate and gives us a proper idea of how the business metrices will proceed based on the given conditions of the scenario. The scenario in the boom case while there is an increase in sales by 5% over the existing 5 sale thus giving an edge of 10% sale annually increment along with the inflation going 8% higher than the base case of 6% edge. Perhaps with increase in 9% cost of the raw material and 5% increase in the factory cost will eventually affect the revenue. Thus the situation comes toa point how certain is it and how likely will it be to affect our decision.

The NPV, IRR and pay back period as per the worked-out sheets implies to a great increase in figures over $10000000.00 and IRR of 56% thus resulting in the pay back period of about only 1.886868 year only.

Now looking at the bust case where the company have a certain chance of ending up in the loss and negative cash flow eventually the project may run in debt.

The NPV, IRR and payback period as per the worked out sheets implies to a great decrease in figures to -$7000000.00 and IRR drops to  26% thus resulting in the pay back period of about  4.56868 year which is 3 years more than the boom case and

Two years more than the base case.

Perhaps the certainty of net cash flow in this case is negative and adding on to the breakeven analysis of the labour cost, raw material , sales price and number of unit sales which plays a crucial part in redirecting the NPV and OCF of the project.

Thus the both scenario of the given boom and bust case the project will most  certainly shine as well as it may fall in the pits of loss, just depending of the volatility of the automobile market.

Order Now
No Fields Found.

Get expert help for Tax Assignment Solution and many more. 24X7 help, plag free solution. Order online now!

Universal Assignment (October 3, 2022) Tax Assignment Solution. Retrieved from
"Tax Assignment Solution." Universal Assignment - October 3, 2022,
Universal Assignment June 25, 2022 Tax Assignment Solution., viewed October 3, 2022,<>
Universal Assignment - Tax Assignment Solution. [Internet]. [Accessed October 3, 2022]. Available from:
"Tax Assignment Solution." Universal Assignment - Accessed October 3, 2022.
"Tax Assignment Solution." Universal Assignment [Online]. Available: [Accessed: October 3, 2022]

Please note along with our service, we will provide you with the following deliverables:

Please do not hesitate to put forward any queries regarding the service provision.

We look forward to having you on board with us.

Get 45%* OFF on Assignment Help

Most Frequent Questions & Answers

Universal Assignment Services is the best place to get help in your all kind of assignment help. We have 172+ experts available, who can help you to get HD+ grades. We also provide Free Plag report, Free Revisions at a Pocket Friendly cost, We offer Best Price in the industry guaranteed.

We provide all kinds of assignmednt help, Report writing, Essay Writing, Dissertations, Thesis writing, Research Proposal, Research Report, Home work help, Question Answers help, Case studies, mathematical and Statistical tasks, Website development, Android application, Resume/CV writing, SOP(Statement of Purpose) Writing, Blog/Article, Poster making and so on.

We are available round the clock, 24X7, 365 days. You can appach us to our Whatsapp number +1 (613)778 8542 or email to . We provide Free revision policy, if you need and revisions to be done on the task, we will do the same for you as soon as possible.

We provide services mainly to all major institutes and Universities in Australia, Canada, China, Malaysia, India, South Africa, New Zealand, Singapore, the United Arab Emirates, the United Kingdom, and the United States.

We provide lucrative discounts from 28% to 70% as per the wordcount, Technicality, Deadline and the number of your previous assignments done with us.

After your assignment request our team will check and update you the best suitable service for you alongwith the charges for the task. After confirmation and payment team will start the work and provide the task as per the deadline.

Yes, we will provide Plagirism free task and a free turnitin report along with the task without any extra cost.

No, if the main requirement is same, you don’t have to pay any additional amount. But it there is a additional requirement, then you have to pay the balance amount in order to get the revised solution.

The Fees are as minimum as $10 per page(1 page=250 words) and in case of a big task, we provide huge discounts.

We accept all the major Credit and Debit Cards for the payment. We do accept Paypal also.

Popular Assignments

Plant Production System Assignment Help

The Best Instant Academic Assistance Online Instant Plant Production System Assignment Help for Students Plant production system assignment help students help them understand the various theoretical and practical aspects of the subject. It is an intensive study of the scientific methods of plant production for an effective and economized production

Read More »

Integrated Science Assignment Help to Boost your Grades Immediately

Integrated Science Assignment Help for Students Integrated Science is taught from a high-school level. This consists of an investigative study of physics, chemistry, biology, forensic science, biotechnology, and geology. This is a course that introduces young students to the interconnectedness between all the scientific knowledge. Students require integrated science assignment

Read More »

Top Human Biology Assignment Help from Experts

Ask an Expert for top Human Biology Assignment Help Sometimes, expert guidance with Human Biology assignment help is all you need in order to boost your grades. Universal Assignment Help Service is a top-ranking student-help platform that offers a wide range of services for students. Students can order human biology

Read More »

Aviation Assignment Help from Experts

The Most Trusted Guidance for Students Aviation Assignment Help for All Challenging Problems Aviation assignment help online from the greatest experts can relieve student pressure to a great extent. It is well known that aviation is an extremely challenging stream, as it is, and students have to keep too many

Read More »

Growing demand for Assignment Help in Ireland

The number of multinational corporations choosing Ireland as their regional headquarters is increasing. So more and more students are choosing Ireland as an idle place to take their degrees. But studying in universities and keeping up the pace is not an easy task and getting good marks is not enough

Read More »

Board appraisal report

Weight: 40% Format: 2,000-word written report. Note: All written assessments should be submitted as Word files (.docx) (Word is available from your AIB Office 365 account) Summary Write a 2000-word Board Appraisal Report where you will evaluate an organisation’s corporate governance practices, board structure including committees and board diversity against

Read More »

49102: Traffic and Transportation

Assignment 2: Transport Modelling and Operations Due: 7 October 2022 This is an individual assignment Please answer the following questions and present your work in a report format clearly including your name and student ID on the cover page. Submit a PDF of your report into the Assignment Activity shown

Read More »

ENV3105 Hydrology Assignment 2

Assignment 2 Due date:       04 October 2022 Weighting:   25% (250 marks) 1. Overview This assessment is designed to test your achievement of selected learning objectives of Modules 6 to 9. In particular, the assignment involves estimation of urban design discharges, reservoir routing and water balance. It is intended to reinforce and

Read More »

Assessment 1: The Journal of Biological Chemistry

Guide abstract All cells within the body are bathed in a fluid. The composition of this fluid is tightly regulated to contain specific levels of various ions. Disruption in the balance of these ions can lead to cell death and damaging inflammation. However, standard surgical practice fails to consider these

Read More »

Project 2: Assignment on Scheme

Due: Oct 1, before midnight. This document first provides the aims of this project. It then lists the requirements as explicitly as possible. It then hints at how these requirements can be met. Finally, it describes how it can be submitted. Aims The aims of this project are as follows:

Read More »

Analysis of Rube Goldberg machine

Week 5 homework for tutorial  In week 4 we needed to also look at how many failures we could have to meet our six sigma level – we will also need to look at this for the times for each stage and total time. To effectively put the flame out

Read More »


ASSESSMENT BRIEF 3: Calculations Summary Title Calculations Due Date Monday the 3rd of October at 11:59 (NSW) AEST – End of Week 5 Length 1000-word (does not include equations, charts, graphs or tables) Weighting  35% Submission  WORD document submitted to Turnitin Unit Learning Outcomes  ULO 3: apply basic statistical analysis

Read More »

THT3114 Research Proposal

Mini Report Assignment 2 Executive Summary (100- 150 words) This is the summary of your research and thus needs to be completed after you have completed writing your research proposal. This is not counted towards the word count. Mention the key aspects of the research proposal. Separate paragraphs Area of

Read More »


ASSESSMENT TWO: LITERATURE REVIEW – DATA MINING TO RESEARCH PROPOSAL – DESIGN RESEARCH INSTRUMENT – PRESENTATION) Task Length: Mini Report (750 words) – Research Proposal) Presentation – Not more than 15 Slides –  (Templates Provided for both the mini report and presentation)  Duration of the Video Presentation – Not more

Read More »

Assignment on COVID-19 pandemic in the hospitality industry

Exploring the new health and safety innovative business practice to restore consumer confidence in the COVID-19 pandemic in the hospitality industry Task Length: Report – 2000 words (+-10%) Task Type Individual Due week and submission deadline Week 11 – SUNDAY – 02/10/2022 – 23:59 Value 40%   PART A: On

Read More »

Assignment Help in Israel

Leading assignments help in Israel Israel is known for its high-tech development, innovations, and entrepreneurship, and is home to the best start-ups in the world. Students from all over the world are drawn to this ecosystem of “innovation and development,” which is supported by a robust higher education system with

Read More »

Animal Production System Assignment Help

Animal Production System Assignment Help: Get 100% guaranteed Expert Assistance Immediately Where can you find the best Animal Production System Assignment Help Online?  Animal Production System assignment help online can boost student results while encouraging interest in the field. The hectic schedule of students, along with their burden of various

Read More »

Immediate Calculus Assignment Help from Top Experts

Immediate Calculus Assignment Help from Top Experts Calculus Assignment Help to Boost your Grades Students can now order instant Calculus assignment help on Universal Assignment Help Service in a fast and easy way. Calculus in taught at a slightly advanced stage of school, and can be an exciting subject in

Read More »

Mathematics Foundation Assignment Help

Effective Mathematics Foundation Assignment Help for Students: Order Expert Solutions Immediately Mathematics Foundation Assignment Help for Students Students often require mathematics foundation assignment help for clearing doubts, understanding the derivation of a formula or theorem, or getting urgent solutions to certain mathematical problems. Online mathematics foundation assignment help is extremely

Read More »

Mathematics Application Assignment Help

Top for Students: Order Expert Solutions Immediately for the Best Results Why do students need Mathematics Application Assignment Help? Mathematics Application assignment help can lead students to perform excellently in the subject in a convenient and relaxed way. Many students find it difficult to apply theoretical knowledge in large and

Read More »

The finest assignment helps in Saudi Arabia

Many students dream to study in Saudi Arabia as they offer some of the best facilities, and they boast one of the most spectacular and rapidly expanding higher education systems in the Middle East. So, this should be of no surprise that every year, many international students prefer to register

Read More »

Expert Solutions for the Best Arithmetic Assignment Help Online

Instant Arithmetic Assignment Help for Students Students most often require Arithmetic assignment help online to solve various calculations. Universal Assignment Help Service provides the best solutions to all arithmetic problems for each student. Students simply have to upload their assignment guidelines on their website, and a customized and accurate assignment

Read More »

Assignment help in Cameroon

The Necessity of Assignment help in Cameroon Today management degrees are one of the most prestigious degrees out there and gaining immense popularity, this degree has the most demand in the market as new startups are emerging day by day, and every company needs the best people to run their

Read More »

Assignment Help in South Korea

Difference between a Good vs Great Online Assignment Tutor The e-learning market is growing at a fast rate due to digitalization. This fact causes an increment in the demand for online tutors as students worldwide searches for a suitable solution for online assignment help in South Korea. You might hear

Read More »

Assignment Help in Japan

Outside-The-Classroom Learning Opportunities It is a typical thinking lesson that stands inside the four walls of a classroom. Some educators say the classroom is the abode of learning and knowledge. We cannot prove these statements wrong. However, one thing is certain: they are partially correct. Learning of concepts starts in

Read More »

Assignment Help in Brazil

Why do Students Consider Online Assignment Help in 2022? Academic life is full of ups and downs. Students who experience such a phase struggle to maintain the equilibrium between personal and professional life. It is because of the load of homework, exams, and participation in extracurricular activities. These events cause

Read More »

Assignment Help in Taiwan

What are the Necessities of Assignment Guidance for Students? As technology takes a new turn around, homework assignments become lengthy and complex. This academic work needs lots of core subject knowledge along with proper research to finish it with proper care. Such work is very time-consuming and hectic for the

Read More »

Assignment Help in Hong Kong

Can You Achieve High Academic Results? Every student wishes to get top scores in their exams. Yet it does not happen if you do not get the correct assignment help in Hong Kong from an online tutor. Such support is in the form of tips, advice, hacks, or taking guidance,

Read More »

VU22977 – Practice in a Legal Environment

Advanced Diploma of Legal Practice – 22565VIC PORTFOLIO- CLIENT MATTER FILE Assessment task 1 Prepare a comprehensive portfolio of documents to create a Client Matter File which must include: Element 1 Area of law Cover sheet stating client name and short description of legal matter Client Instruction Sheet, Costs Agreement

Read More »

KIT714 ICT Research Principles: Assignment 1

Practical Qualitative Research Exercise                                                                                                                                         Type:                 In-Semester, Individual Assignment Task Length:   minimum 2,000 words Weighting:     20% of total assessment for this unit Due Date:       Friday 5 August 2022 – 11:55 pm (Week05) Submission:    electronic submission on MyLO (WORD or PDF) Description:    This practical exercise will engage students in a qualitative research

Read More »

Can't Find Your Assignment?

Get Free Assignment

Open chat
Free Assistance
Universal Assignment
Hello 👋
How can we help you?