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Alberta Hideaways is considering a new project whose data are shown below. The equipment has a 5-year life. This equipment falls into a class with
Alberta Hideaways is considering a new project whose data are shown below. The equipment has a 5-year life. This equipment falls into a class with a CCA rate of 25% and would have zero salvage value. Other data is as follows. What is the present value of CCA tax shield?
WACC | 12.0% |
Equipment cost | $90,000 |
Sales revenues each year | $60,000 |
Cash operating costs each year | $25,000 |
Tax rate | 40.0% |
$23,021 | ||
$25,800 | ||
$23,402 | ||
$24,324 |
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