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XYZ inc. considers an investment project that requires $500,000 in new equipment and $40,000 in extra NWC at the beginning of the project. The

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XYZ inc. considers an investment project that requires $500,000 in new equipment and $40,000 in extra NWC at the beginning of the project. The NWC will need to be increase by another $5,000 at the end of year t-2 and it will remain at the $45,000 level until the project is completed. The projects will lead to an increase in operating pre-tax net revenue of $180,000 per year and will last for 4 years. At the end of the project (beginning of year t-5), the equipment can be sold for the salvage value of $200,000. The equipment belongs to the CCA class with d=30%, the corporate income tax rate is 40%, and the cost of capital is 8% Problem 1 (2 points): Write down the UCC/CCA table. Use the format below: Year 1 2 3 4 UCC (beginning of the year) CCA UCC (end of the year)

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