A new electronic process monitor costs $$7,000,000.$ This cost could be depreciated at $30\%$ per

year $($CCA Class $10).$ The monitor could be sold for $$1,428,595$ at the end of five years. The new

monitor would save the firm $$2,400,000$ before taxes in annual operating costs for the five years.

There would be no impact on net working capital. The firm$$s weighted average cost of capital is

$15\%$ and the corporate tax rate is $40\%.$