In the previous question, suppose the monitor was assigned a 25 percent CCA rate. All the other facts are the same. Will the NPV be larger or smaller? Why? Calculate the new NPV to verify your answer.

Data from previous questions:

A new electronic process monitor costs $990,000. This cost could be depreciated at 30 percent per year (Class 10). The monitor would actually be worthless in five years. The new monitor would save $460,000 per year before taxes and operating costs. If we require a 15 percent return, what is the NPV of the purchase? Assume a tax rate of 40 percent.