Question
McMaster Student Services Inc. provides local rides to 100 students for an annual membership fee. The company purchases a van for $50000 with a maintenance
McMaster Student Services Inc. provides local rides to 100 students for an annual membership fee. The company purchases a van for $50000 with a maintenance cost of $2700 in the first year rising by $700 per year thereafter. The company plans to keep the van for 4 years and estimates a salvage value of $9000. The CCA rate for the van is 30%, the after tax capital cost is 8% and the company pays a tax rate of 30%. 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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Personal Finance Turning Money into Wealth
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