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New equipment costs $1,219,000 and is expected to last for five years with the salvage value of 13% of the equipment cost. During this time
New equipment costs $1,219,000 and is expected to last for five years with the salvage value of 13% of the equipment cost. During this time the company will use a 20% CCA rate. The new equipment will save $490,000 annually before taxes. If the company's required rate of return is 8%, determine the PVCCATS of the purchase. Assume a tax rate of 35%. Please show all the calculations by which you came up with the final answer.
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