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Determine the present value of the incremental tax

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Reference no: EM133024364

Question - A company purchases equipment to be used in business operations for $250,000. The equipment has a CCA rate of 25%. You intend to sell the equipment in year 8 for a salvage value of $8,000. At the time of sale, you still anticipate having other assets in the class. Tax rate is 35%. Company uses a 12% rate of return. Determine the present value of the incremental tax shields generated.

Reference no: EM133024364

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