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QUESTION #6 Capital Budgeting D etop Kanches, Inc. is considering the purchase of a new helicopter for $325.000. The firm som has a book value
QUESTION #6 Capital Budgeting D etop Kanches, Inc. is considering the purchase of a new helicopter for $325.000. The firm som has a book value of $85,000, but can only be sold for $60,000. The new helicopter will be subject to 25% CCA. It is expected to save $62,000 for 7 years A. It is expected to save $62,000 for 7 years after taxes through reduced fuel and maintenance expenses. Tabletop Ranch is in the 40% tax bracket and nas capital. Calculate the net present value of the helicopter purchase and state whether or not the firm should buy
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