Question: A company is considering a 4-year project that would require an asset with an installed cost of $3,000,000. The asset qualifies for a 30% CCA

A company is considering a 4-year project that would require an

A company is considering a 4-year project that would require an asset with an installed cost of $3,000,000. The asset qualifies for a 30% CCA rate and is expected to have no salvage value at the end of the 4 years. The project would require a $220,000 up-front investment in net working capital and is expected to generate annual before-tax cost savings of $750,000. Assume the company requires a return of 12% and has a tax rate of 20%. What is the present value of the CCA tax shield

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