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Determine the PVCCATS of the purchase

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Question - Welter Inc is purchasing a new equipment at a cost of $675,000. The equipment is expected to last for five years and will have no salvage value. The new equipment will save $120,000 (before taxes) in operating expenses annually. If the company's required rate of return is 12% and the CCA rate on equipment is 30%, determine the PVCCATS of the purchase. Assume a tax rate of 35%.

Reference no: EM133172524

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