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Delta Corporation is considering an investment of $400,000 in a new machine, which belongs to asset class 43 with a CCA rate of 30 percent.
Delta Corporation is considering an investment of $400,000 in a new machine, which belongs to asset class 43 with a CCA rate of 30 percent. The machine is not the only asset in the asset class. The fim's effective tax rate is 40 percent. The company has the following estimates: Project life Discount rate (k) Salvage value Annual after-tax operating cash flows $80,000$100.000 $60,000 Base Case Best Case Worst Case 8% $50,000 $60,000 $40,000 6 years 8 vears 4 years 10% 12% Based on the NPV of each scenario, would you recommend the company to undertake the project if each sce nario is equally likely
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