Quick emergency, Please ASAP and please show with calculation. Thank you

1) Waverly Company is evaluating the purchase of a new machine that costs $720,000, will have a CCA rate of 25%, an estimated useful life of 8 years and a $30,000 terminal disposal price. The companys marginal tax rate is 34%. It is estimated that the machine will increase before tax profits by $180,000 annually. Montcalm requires a 16% after tax rate of return. Based on the above information, calculate the lost tax shield if the company disposes of this machine after 8 years.

Multiple Choice

• $(1,897)

• $(4,882)

• $(6,220)

• $(5,451)

• None of the above

2)

Net Present Value

Optimistic Company is evaluating the purchase of a new machine that costs $700,000, will have a CCA rate of 25%, an estimated useful life of 10 years and a $30,000 terminal disposal price. This piece of equipment would need a major overhaul at the end of 7 years that is expected to cost $40,000. Also, if this machine is purchased there will be a required increase in working capital of $60,000. This entire amount will be released at the end of the machines useful life. The companys marginal tax rate is 34%. It is estimated that the machine will increase before tax profits by $225,000 annually. Optimistic Company requires a 18% after tax rate of return. Based on the above information, calculate the net present value of this option. The correct answer is based on Microsoft Excel functions. If you are using the present value tables, your answer may not be exactly one of the choices but it should not be too far off the provided answers.

• $50,029

• $38,696

• $42,965

• $39,068

• None of the above

3)

Internal Rate of Return

Own The Ice is evaluating the purchase of a new zamboni that costs $940,000, will have a CCA rate of 20%, an estimated useful life of 10 years and a zero terminal disposal price. The companys marginal tax rate is 32%. It is estimated that the zamboni will create the most amazing ice surface, attracting significant additional arena rentals and therefore increase annual before tax profits by $190,000.

The net present value of this investment using a 10% after tax rate of return is $45,296. Based on this information, calculate the internal rate of return to two decimal places using interpolation. The correct answer is based on Microsoft Excel functions. If you are using the present value tables, your answer may not be exactly one of the choices but it should not be too far off the provided answers.

Multiple Choice

• 10.82%

• 11.74%

• 11.17%

• 11.59%

• None of the above