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A company purchased a piece of equipment for $10K that has a 5- year useful life and no salvage value. Corporate tax rate is 30%,

A company purchased a piece of equipment for $10K that has a 5- year useful life and no salvage value. Corporate tax rate is 30%, WACC is 10%.

a.What is the PVTS if the equipment is on a 20% declining balance CCA rate (no half year rule here)

b.What is the PVTS if CCA is 20% straight line?

c.What accounts for the difference in the two PV's?

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