You are considering investing in a piece of equipment to implement a cost-cutting proposal. The pre-tax cost
Fantastic news! We've Found the answer you've been seeking!
Question:
You are considering investing in a piece of equipment to implement a cost-cutting proposal. The pre-tax cost reduction is expected to equal $41.67 for each of the three years of the project's life. The equipment has an initial cost of $125 and belongs in a 20% CCA class. Assume a 34% tax bracket, a discount rate of 15%, and a salvage value of zero.
What is the value of the annual depreciation tax shield for year 2 of the project?
Posted Date: