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
Balance of Payments, Mobility of Labor and Capital, Trade and Wages Balance of Payments 1. Will a country running a trade deficit import or export capital?  Explain. 2.

Dear expert, Assume that we have a multivariate unobserved component model (or SUTSE, seemingly unrelated time series equation model) in STATE SPACE form, that is: Y(t) = H A(t) +



Least squares method of fitting a line ( the line of best fit or the regression line) through the scatter diagram is a method which minimizes the sum of squared vertical deviations



Hi I just want to know if you many be able to solve these three cases for intermediate accounting class! Thank you

what''s the asset?