Question
AALE Inc. is considering the purchase of a new machine for $50,000, installed.This machine is included in CCA class 8 (20%). Theyexpect to sell the
AALE Inc. is considering the purchase of a new machine for $50,000, installed.This machine is included in CCA class 8 (20%). Theyexpect to sell the machine at the end of its 4-year operating life for $10,000. Determine the present value of the CCA tax shield if themarginal tax rate is 28%, its weighted average cost of capital (WACC) is10% and AALE Inc.has other equipment in the asset class.
Input your answer rounded to 2decimal places and do not include any symbols such as %,comma, or $.
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
