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A car company will purchase new sedan with a $1,000,000 now. Sedans fall under CCA class 16 and are allowed a CCA rate of 40%.
A car company will purchase new sedan with a $1,000,000 now. Sedans fall under CCA class 16 and are allowed a CCA rate of 40%. The project will generate revenue in excess of expenditure of $450, 000 per year for 5 years. The net working capital will increase by $50,000 due this new project, no intermediate changes, and a reversion to normal working capital requirement will occur at the end of 5 years. The salvage value of the sedan will be sold for $100,000 . The tax rate is 45%. The opportunity cost is 15%, what is the NPV of the project?
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