klp.3 You purchased equipment in 2017 for $120,000 plus it costs $20,000 to have it delivered and installed. You alsotraded yoour old computer worth $20,000. The old CCA half-year rule still applied. Based on past information,you believe that the equipment will have a salvage value of $19,000 in 6 years. The company's marginal tax rateis 40%. If the asset's CCA rate is 20% and the required return on this project is 10%, what is the present valueof the tax shield from CCA less the present value of the tax shield lost from salvage?

The objective of the question is to calculate the present value of the tax shield from Capital Cost…

Answered: You purchased equipment in 2017 for…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 11P

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