Question
Consider a firm that has invested in a 5-year project. It faces a 40% corporate tax rate and its investment belongs to the CCA class
Consider a firm that has invested in a 5-year project. It faces a 40% corporate tax rate and its investment belongs to the CCA class with a 30% depreciation rate. A new "take care of equipment" program implemented by the firm allowed it to increase the salvage value of the equipment by $20,000. What was the effect of this program on NPV if the project's discount rate is 12%?
Question 19 options:
| $6,809 |
| $8,106 |
| $9,714 |
| $11,349 |
Consider a firm that has invested in a 5-year project. It faces a 40% corporate tax rate and its investment belongs to the CCA class with a 30% depreciation rate. By how much the NPV of the project will increase if the firm would be able to negotiate a $20,000 discount on the equipment it bought? Assume that the salvage value of the equipment stays the same. Assume also that the project's discount rate is 12%.
Question 20 options:
| $11,349 |
| $12,000 |
| $10,714 |
| $14,592 |
Consider a firm that has invested in a 5-year project. It faces a 40% corporate tax rate and its investment belongs to the CCA class with a 30% depreciation rate. By how much the NPV of the project will increase if the firm were able to use its inventory more efficiently and reduce the required NWC by $20,000? Assume the project's discount rate is 12%.
Question 21 options:
| $9,013 |
| $8,651 |
| $12,000 |
| $9,974 |
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