Question
Fool Proof Software is considering a new project whose data are shown below. The equipment has an economic life of 3 years, and is in
Fool Proof Software is considering a new project whose data are shown below. The equipment has an economic life of 3 years, and is in the CCA class 10 (30%). Revenues and cash operating costs are expected to be constant over the projects 3-year life. What is the CCA tax shield for Year 1?
| Equipment cost | $65,000 |
| Equipment Setup Cost | $8,000 |
| Annual cash operating costs | $25,000 |
| Tax rate | 35.0% |
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
5th edition
