Payback method highlights liquidity. Managers prefer projects with shorter payback periods if all other things are equal. Weaknesses: fails to explicitly incorporate the time value of money, does not consider a project's cash flows after the payback period. Nonuniform cash flows - cash flows over successive years are accumulated until the amount of net initial investment is recovered. Payback period = 2 years + (40000/80000 x 1 year) = 2,5 years. Accrual accounting rate of return (AARR) method divides the average annual (accrual accounting) income of a project by a measure of the investment in it. AARR= increase in expected average annual after-tax operating income / net initial investment. (( total cash inflow over 5 years/ 5 years - annual depreciation)/net initial investment. After-tax flows: operating cash inflows from investment in machine 120000 PAGE 746 Deduct income tax cash outflow at 40% 48000
sourced income of non-residents of Ukraine. The taxable base for CIT is calculated as an adjusted gross worldwide income less deductible expenses, which account for tax depreciation allowances. The gross worldwide income includes any income from the sale of goods/works/ services, capital gains, foreign exchange gains, free-of-charge transfers and other taxable receipts in cash, in kind, or in form of intangibles accrued within the reporting period. Ukraine uses an accrual method for tax accounting. Income is realized in the tax period when the transfer of ownership title to goods/services/works occurred, while deductible expenses (forming the cost of production) can be recognized on the date when the relevant goods/services/works were supplied. Source: KPMG. Your Business in Ukraine 2012 Income exempt from CIT The following types of income are not included in the taxable profit: capital contributions in equity;
Cases on insolvency are considered by the City Courts of Tbilisi and Kutaisi. The procedures can be initiated only if a company is insolvent or if it is expected that it will not be able to meet its financial obligations. The acceptance of an application by the court and commencement of insolvency procedures entails a suspension of all the enforcement (execution) measures initiated against the debtor. Additionally, the accrual of the interest or penalties to the outstanding debts shall be suspended. Upon commencement of insolvency procedures a custodian is appointed who monitors the man- agement of the company, protects the debtor's property, studies its financial position and submits the information to the mediation council. The latter is composed in accordance with the agree- ment between the debtor and the creditors. The mediation council examines the position of the
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