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You firm just bought a new machine. The machine cost $1,150,000. The machine will be operated for 4 years. It will then be sold for
You firm just bought a new machine. The machine cost $1,150,000. The machine will be operated for 4 years. It will then be sold for its salvage value of $140,000. The CCA rate is 20%. The tax rate is 24%. The required rate of return is 10% compounded annually. The asset class will remain open. Assume the half-year rule is in effect. What is the present value of the CCA tax shield? Your answer should be accurate to two decimal places.
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