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aeropa84 aeropa84
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6 months ago
Suppose a project requires a capital investment of $300,000. The project will last for six years, at which time the asset will be sold for $90,000. The asset will be depreciated on a declining balance basis at a CCA rate of 20%. The firm's marginal tax rate is 40%. The firm's required rate of return is 8%. Assume the asset class remains open after the asset is sold. What is the present value of the CCA tax savings for the project assuming accelerated investment incentive is applicable for CCA in year 1?

▸ $63,472.64

▸ $65,950.56

▸ $72,684.53

▸ $66,335.32
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
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aupadhay287aupadhay287
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aeropa84 Author
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6 months ago
Correct Slight Smile TY
dedricgard
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Brilliant ツ
kiara23247843
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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