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melisooflyy melisooflyy
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4 weeks ago
Maritimes Toy Corporation (MTC) is considering investing in a piece of new equipment worth $50,000. The equipment will increase operating revenue by $10,000 per year for ten years. The equipment is expected to have no salvage value at the end of ten years, and capital cost allowance is claimed at 20% on a declining balance. The corporate tax rate is 38%, and MTC's opportunity cost of capital is 9%. Assume the asset class remains open after the asset is sold and the half-year rule applies in the first year. The project's NPV is approximately

▸ $26,739.

▸ $2,352.

▸ $3,321.

▸ $27,709.
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
Author:
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ricyoungricyoung
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4 weeks ago
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