Agatha's Murder Inc. has just purchased and installed a piece of equipment for $1,000,000. The equipment can
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Agatha's Murder Inc. has just purchased and installed a piece of equipment for $1,000,000. The equipment can be sold off at the end of 5 years for $120,000. For tax purposes, the equipment belongs to a continuing asset class with a CCA rate of 30%. Given that the company's marginal tax rate is 40% and its WACC is 20%, what is the present value of CCA tax shields on this new equipment?
Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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