# Question: You are given the following information C0 300 000 CCA

You are given the following information: C0 = $300,000; CCA rate (d) = 0.3; T = 0.4; RF = 4.5%; project beta = 1.2; market risk premium = 10%; SVn = $35,000; UCCn = $55,000. This project has a 5-year life.

a. Calculate the discount rate.

b. Assuming that the asset class is terminated, calculate the present value of the CCA tax shield.

c. Calculate the PV (CCA tax shield) if the asset class remains open.

a. Calculate the discount rate.

b. Assuming that the asset class is terminated, calculate the present value of the CCA tax shield.

c. Calculate the PV (CCA tax shield) if the asset class remains open.

## Answer to relevant Questions

You are given the following information: CFBT = $195,000; T = 40%; this project will last for six years. The project has a 1.5-percent extra risk premium compared with the firm’s cost of capital. The firm has 30 percent ...Repeat Practice Problem 41 assuming that the project would generate annual revenue of $70,000 and annual costs of $40,000 for six years. Also, assume the asset class will remain open.GG Inc. has a project that requires ...Explain how real option valuation (ROV) is applied.What is the difference between sensitivity analysis and scenario analysis?You are a risk arbitrageur and you observe the following information about a deal: the current price of the target is $20 per share and the current price of the bidder is $15 per share. The bidder is offering two bidder ...Post your question