Calculate the total pv of the tax shield, Basic Statistics

Nortel is considering the purchase of a new call routing system. The system will cost $50M to purchase, an additional $7M to install, and will last for 30 years. The CCA rate associated with the system is 6%, the firm's margin tax rate is 20%, and the firm's WACC is 9%.

a. Using Excel, create a CCA table, as in class for the 30 year life of the asset. Assume that the asset is sold for its UCC at the end of year 30.

b. Add a column that shows the value of the annual tax shield. 

c. Add a column that shows the PV of the annual tax shield. 

d. Calculate the total PV of the tax shield in Excel. 

e. Calculate the PV of the tax shield using the PVCCA formula. 

 

 

Posted Date: 3/1/2013 12:04:50 AM | Location : United States







Related Discussions:- Calculate the total pv of the tax shield, Assignment Help, Ask Question on Calculate the total pv of the tax shield, Get Answer, Expert's Help, Calculate the total pv of the tax shield Discussions

Write discussion on Calculate the total pv of the tax shield
Your posts are moderated
Related Questions

Shafts are cut to length by two machines, A and B. Each machine cuts 50 percent of all shafts in approximately the same amount of time. Machine A''s shafts are all good, but Machin

can you provide me the problem with the solution base above?

Bambridge Associates LLP has hired you to analyze the demand in 30 regional markets for custom financial plans for high net worth individuals (Y). A statistical analysis of demand

What is the probability of selecting exactly one red and one blue fish (Total red is .479 and total blue is .521 and total of both is 1.000) I cannot figure out the formula or how

College administrators across the country have become very concerned after noticing an increase in the number of deaths in college students from binge drinking.  Several psychologi

Question 1 A courier company conducted a brainstorming session amongst drivers to ascertain the reasons why it was unable to deliver items to households, always right first ti


Nuclear force Is a short range force extending upto 10 fm. It is fifty-sixty times stronger than electromagnetic force. Nuclear force is independent of charge. Nuclear force betw

importance of time series in statistics