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I used PW = - PW( initial cost)*Capital tac factor + PW(Savings from rent)*(1- tax%)+ PW(Tax savings) + PW(Salvage value)*Capital salvage factor Are these the
I used PW = - PW( initial cost)*Capital tac factor + PW(Savings from rent)*(1- tax%)+ PW(Tax savings) + PW(Salvage value)*Capital salvage factor
Are these the right formulas to use ? if not please provide it
The Shell Corporation has a 34% tax rate and owns a piece of petroleum-drilling equipment that costs $138,600 and will be depreciated at a CCA rate of 30%. Shell will lease the equipment to others and each year receive $34,600 in rent. At the end of five years, the firm will sell the equipment for $34,000. All values are presented in todays dollars. Calculate the overall present worth of these cash flows with tax effects if market interest rate is 10% and annual inflation rate is 2%Step by Step Solution
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