Question
A new binder will cost SlamCo $17,000, generate net savings of $3,000 per year over a seven year life, and be salvaged for $1000. SlamCo's
A new binder will cost SlamCo $17,000, generate net savings of $3,000 per year over a seven year life, and be salvaged for $1000. SlamCo's before tax MARR is 10 per cent, it is taxed at 40 per cent, and the binder has a 20 per cent CCA rate. (a) What is the company's exact after tax IRR on this investment? Should the investment be made? (5 marks) (b) Should the investment be made? (2 marks)
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Auditing and Assurance Services
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
6th edition
978-1259197109, 77632281, 77862341, 1259197107, 9780077632281, 978-0077862343
