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A new machine costs $925,000, with an applicable CCA rate of 30 percent per year. The machine will be worthless in five years. Installing the
A new machine costs $925,000, with an applicable CCA rate of 30 percent per year. The machine will be worthless in five years. Installing the machine would save $490,000 per year before taxes and operating costs. If the required return is 12 percent, what is the PVCCATS value? Assume a tax rate of 40 percent.
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