What is the present values of cca tax shield

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The cost of an equipment is $300,000 and falls in asset Class 9 for CCA deprecation purpose. The depreciation rate of Class 9 assets is 25%. You intend to sell the equipment in 5 years for a salvage value of $40,000. At the time of sale, you still anticipate having other assets in the give asset class. Your tax rate is 35% and your discount rate is 14%.

What is the present values of CCA tax shield? Hints: You can use CCA tax shield formula provided in the textbook.

(If you're using Excel for providing your answer, you MUST show all the process of deriving the answers.)

Reference no: EM132680540

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