Calculate the total pv of the tax shield, Basic Statistics

Assignment Help:

Nortel is considering the purchase of a new call routing system. The system will cost $50M to purchase, an additional $7M to install, and will last for 30 years. The CCA rate associated with the system is 6%, the firm's margin tax rate is 20%, and the firm's WACC is 9%.

a. Using Excel, create a CCA table, as in class for the 30 year life of the asset. Assume that the asset is sold for its UCC at the end of year 30.

b. Add a column that shows the value of the annual tax shield. 

c. Add a column that shows the PV of the annual tax shield. 

d. Calculate the total PV of the tax shield in Excel. 

e. Calculate the PV of the tax shield using the PVCCA formula. 

 

 


Related Discussions:- Calculate the total pv of the tax shield

Rebate, Refund can be defined as return of a part of a purchase price by a ...

Refund can be defined as return of a part of a purchase price by a seller to a buyer, usually on a purchase of a specified quantity or a value of goods within a specified period.

Amplification, Amplification is the process by which the magnitudes of the ...

Amplification is the process by which the magnitudes of the variable quantity is increasing, especially the magnitude of voltage, current or power, without changing any other quant

Calculate the unit of omputer peripheral device, Northern Hi-Tec Electronic...

Northern Hi-Tec Electronics Limited manufactures six computer peripheral devices: internal modems , external modems , circuit boards , CD drives , hard disk drives , and memo

Index numbers, Analyse the different types of index numbers numbers numbe...

Analyse the different types of index numbers numbers numbers and their benefit to the Differentialgleichungen business world.

Sigma notation, Given the following pairs of random variables and comput...

Given the following pairs of random variables and compute the following sums. (NB: show your working table). 3 -7 2 10 6 11 10 12 15 14 (b) (c) (d) ?¦?2y

What is job costing, What is job costing? Definition of job costing, Job co...

What is job costing? Definition of job costing, Job costing usually, it is the allocation of all material, time & expenses to an individual project or job. Particularly, Jobs costi

calculate the chi-square statistic, The table below shows a breakdown of w...

The table below shows a breakdown of women between the ages of 20 to 64 who have had a Pap smear--it shows the number in each age group cross tabulated with the time of their last

Draw a gantt chart, Consider the Kristen Cookie Company case. From the n...

Consider the Kristen Cookie Company case. From the note: Wash&Mix: 6 mins per order (max 3 dozen) Dish up: 2 mins per dozen Set up timer: 1 min per dozen Bake: 9 mins per dozen

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd