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Question 6 Zeta Corp. purchased a machine for $1,500 million. The machine has a functional life of 10 years with no salvage value. According to

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Question 6 Zeta Corp. purchased a machine for $1,500 million. The machine has a functional life of 10 years with no salvage value. According to Canada Revenue Agency (Canadian government tax depa rtmentl's tax rules (Capital Cost Allowance, or CCA), the depreciation of this machine uses a straight-line approach (i.e., the same amount per year for its lifetime, until it depreciates to zero}. The EBITDA (in net cash flow) generated by the machine is $300 million in year 1 and then declines by a rate of 10% per year for the next 9 years. An income tax rate of 35% applies to the company's net income if positive. If the net income is negative, no tax will be collected. Taxes are paid out in cash. The required rate of return for the company is 10% per year. There are no debt obligations associated with this machine. a} Complete the Table below. Show your calculations. Depreciation Tax Year E BITDA Expense E BIT Expense _ - 3 4 5 _- _ 8 9 10

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