Problem 10-48 Calculating Required Savings (LO5, 8) A proposed cost-saving device has an installed cost of $590,000. It is in Class 8 (CCA rate =20% ) for CCA putposes, It will actually function for five years, at which time it with have no value. There are no working capital consequences from the investment, and the tax rate is 35%. a. What must the pre-tax cost savings be for us to favour the investment? We require an 12% return. (Hint: This one is a variation on the problem of setting a bid price) (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Cost savings \$ b. Suppose the device will be worth $83,000 in salvage (before taxes). How does this change your answer? (Do not round your intermediote colculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Cost savings $ Problem 10-48 Calculating Required Savings (LO5, 8) A proposed cost-saving device has an installed cost of $590,000. It is in Class 8 (CCA rate =20% ) for CCA putposes, It will actually function for five years, at which time it with have no value. There are no working capital consequences from the investment, and the tax rate is 35%. a. What must the pre-tax cost savings be for us to favour the investment? We require an 12% return. (Hint: This one is a variation on the problem of setting a bid price) (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Cost savings \$ b. Suppose the device will be worth $83,000 in salvage (before taxes). How does this change your answer? (Do not round your intermediote colculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Cost savings $