Question: Please show full work Question Four: (8 marks) Cayanan Protection Services Ltd. has been awarded a 4-year contract in Fort McMurray to apply fire coatings

Please show full work

Question Four: (8 marks) Cayanan Protection Services Ltd. has been awarded a 4-year contract in Fort McMurray to apply fire coatings for a new oil-sand refinery. The company will need to purchase a new 650 CFM (cubic feet per minute) compressor for their spray applications. The firm can buy a compressor (cash purchase) for $200,000, which will have a salvage value at the end of 4 years of $25,000. The equipment has a depreciation rate of 30% (50% rule) and the firm will sell the compressor at the end of the 4-year contract. No maintenance expenses will be required since the compressor has a 4-year comprehensive warranty. The company uses a MARR of 10% and has a marginal tax rate of 20% The manager has asked you to calculate the CCA and UCC amounts for the compressor and list them in a Table. (1 mark) a) Calculate the after tax present worth if the company buys the compressor. (4 marks)

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