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Calculate the npv of the purchase

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Question - Telus Brewery Inc. is purchasing a new asset of $225,000 and is expected to have useful life for five years with no salvage value. The company will use a 30% CCA rate as per the appropriate classification of the asset. The new asset will save $90,000 annually before taxes. Using the tax shield approach, calculate the NPV of the purchase. The company's required rate of return is 11%, with a tax rate of 30%.

Reference no: EM133093045

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