Java Cafes tax rate is 45 percent and the appropriate discount rate is 8 percent. It is

Question:

Java Cafe’s tax rate is 45 percent and the appropriate is 8 percent. It is considering another project. Each asset class consists only of the project asset and will be terminated at the end of the project. Java Cafe is not capital constrained. The initial investment is $85,000; annual pre-tax operating cash flow is $32,500; is $65,000; the CCA rate is 30 percent; and the length of the project is six years. Should Java Cafe take this project? Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...