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nikki1992 nikki1992
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6 months ago
Canadian Auto Shop Services has an opportunity to invest $550,000 in a new project that will generate additional operating profit of $200,000 per year. The asset has a six-year life, a CCA rate of 30%, and an expected salvage value of $60,000. The company's cost of capital is 12% and marginal tax rate is 35%. The risk premium for this type of project is 1.5%. Assume the asset class remains open after the asset is sold and the half-year rule applies in the first year. What is the project's NPV?

▸ $137,415

▸ $425,214

▸ $108,680

▸ $384,655
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
Author:
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madizmmadizm
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6 months ago
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nikki1992 Author
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6 months ago
You make an excellent tutor!
gage
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Yesterday
Good timing, thanks!
Ifekwunigwe
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2 hours ago
Brilliant ツ
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