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Required information Tabletop Ranches, Inc. Is considering the purchase of a new helicopter for $325,000. The firm's old helicopter has a book value of $85,000,
Required information Tabletop Ranches, Inc. Is considering the purchase of a new helicopter for $325,000. The firm's old helicopter 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 after taxes through reduced fuel and maintenance expenses. There will be no residual value left at the end of the 7 th year. Tabletop Ranch is in the 40% tax bracket and has a 12% cost of capital. What is the PV of cashflows for the 7 years? What is PV CCA for the helicopter purchase? What is the PV for all cash flows that occur in year 0 only
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