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
X Ltd had 100000 9% redeemable preference shares of Rs.100 each full paid. The company decided to redeem these pref. shares at par by issue of sufficient number of equity shares of


Explain the Financial Accounting. Under the Financial Accounting System the producing of economic purchase are done in the Cash and Publication, in other Bookkeeping as Sales, P

Automated clearing house (ach) A across the country settlement and selection program that provides for automated submission and arrangement of resources. Although the phrase Elec

Choose a variable and collect data consisting of at least 30 values. Before collecting the data, decide what a likely average might be, then complete the following: a. Write a b


If an exact answer isn''t possible, I really just need a guide. The company we are using is GameStop Corp, listed as GME on the NYSE. Using the supplied information and referring

journal entries of a loan swap with different currency

Nuclear holocaust It is the name given to large scale destruction and devastation that would be caused by the use of nuclear weapon. The radioactive waste will hang like a cloud i

Flifla sells tomatoes every day in Suk al Marqazi, the downtown fruit and vegetable market. He finds that he can order tomatoes in crates of 25 kg and he is able to stock a maximum