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REMAX inc. is choosing his company house. House A costs $120,000 initially, the operating expenses total to $23,000 per year and has a 4-year life,
REMAX inc. is choosing his company house. House A costs $120,000 initially, the operating expenses total to $23,000 per year and has a 4-year life, after which it will sell for $24,000. House B on the other hand costs $144,000 initially, the operating expenses total to $28,000 per year and has a 3-year life after which it will sell for $17,000. The corporate tax rate is 40%. The CCA rate is 40%, and you assume a required rate of return of 12% in this case. What are the EACs?
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