After-tax present worth of the car

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A car is purchased for $40000 at a CCA rate of 20% (depreciation = CCA rate), corporate tax rate of 30%, current intrest rate is 12.2%, inflation is 2%, with a salvage value of $4000 after its 8 year service life:

a. What is the after-tax present worth of the car?

b. What is the Equivalent Annual Cost (EAC) of the car in its first year?

Reference no: EM13903813

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