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I Q5 B. (20 Marks) You purchase equipment for $100,000 and it costs $10,000 to have it delivered and installed. Based on past information, you

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I Q5 B. (20 Marks) You purchase equipment for $100,000 and it costs $10,000 to have it delivered and installed. Based on past information, you believe that you can sell the equipment for $17,000 when you are done with it in 6 years. The company's marginal tax rate is 40%. If the applicable CCA rate is 20% and the required return on this project is 10%, what is the present value of the CCA tax shield? PV tax shield on CCA = IdT 1+0.5r S,dT. 1 X d+r 1+1 d+r (1+r)

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