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aznhermit101 aznhermit101
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2 months ago
Suppose a new machine costs $100,000 and will provide nominal operating income of $50,000 in each of the next four years. The machine belongs to asset class 9, which has a CCA rate of 30%. The machine is expected to be sold for $25,000 at the end of four years. The real discount rate has been estimated to be 8% per year. Expected inflation is 2.5% over the next four years. The firm's marginal tax rate is 38%. Assume there are other assets in the asset class when the machine is sold and that the half-year rule applies in year one. What is the NPV of the project?

▸ $107,358.25

▸ $94,761.86

▸ $44,427.84

▸ $35,435.82
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
Author:
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danterichdanterich
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2 months ago
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aznhermit101 Author
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2 months ago
Thanks for your help!!
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Brilliant
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2 hours ago
Just got PERFECT on my quiz
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