Your corporation is considering whether to undertake a project or not. The project requires the purchase of
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Question:
Your corporation is considering whether to undertake a project or not. The project requires the purchase of a machine costing $500,000. The machine has a useful life of five years and a CCA rate of 20%. The machine is estimated to be worth $30,000 at the end of the fifth year. The project is expected to generate $300,000 every year during the five-year period. The tax rate is 30% and the required rate of return is 10%. Should the project be accepted or not? Show your work.
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