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The Lento Corporation recently purchased a long - term asset for $ 4 0 , 0 0 0 , 0 0 0 . The company's

The Lento Corporation recently purchased a long-term asset for $40,000,000. The company's CFO expects that the asset will have a 6 year
life. The asset has an 22% CCA rate. At the end of year five it is expected that the company will be able to sell the asset for $12,000,000.
A. Using the half-year rule, determine the value of the terminal loss or recapture at the end of year six.
B. Assuming a 20% tax rate calculate the tax savings due to CCA in year six.
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