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5.A. The Andantino Corporation recently purchased a long-term asset for $12,223,500. The company's CFO expects that the asset will have a 10 year life.
5.A. The Andantino Corporation recently purchased a long-term asset for $12,223,500. The company's CFO expects that the asset will have a 10 year life. The asset has a 20% CCA rate. At the end of year 10, it is expected that the company will be able to sell the asset for $2 million. Given this information, determine the value of the terminal loss or recapture at the end of year ten. Discussion: 5.B. Andantino's effective tax rate is 18%. How much tax will the company save in year five, due to the inclusion of CCA in the income statement?
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