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McMaster Student Services Inc. provides local rides to 100 students for an annual membership fee. The company purchases a van for $45000 with a maintenance
McMaster Student Services Inc. provides local rides to 100 students for an annual membership fee. The company purchases a van for $45000 with a maintenance cost of $2700 in the first year rising by $400 per year thereafter. The company plans to keep the van for 6 years and estimates a salvage value of $9000. The CCA rate for the van is 25%, the after tax capital cost is 10% and the company pays a tax rate of 35%. What is the minimum after tax annual membership fees the company should charge each student in order to cover their van costs
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