question 1

a mew machine will cost $720000 it is in a CCA class pool that uses a declining balance rate of 20% the company tax rate is 42% and it requires a 12% rate of return on investments calculate the present value of the tax shield the first year assuming the savings occur at year end

1-$54000

2-$60480

3-$37285.71

4-$30240

5-$27000