In: Finance
Economics question. Please answer Asap! Will provide thumbs up!
The Shell Corporation has a 34% tax rate and owns a piece of petroleum-drilling equipment that costs $130,300 and will be depreciated at a CCA rate of 30%. Shell will lease the equipment to others and each year receive $41,300 in rent. At the end of five years, the firm will sell the equipment for $29,700. All values are presented in today's dollars.
Calculate the overall present worth of these cash flows with tax effects if market interest rate is 10% and annual inflation rate is 2%.
(Note: Don't use the $ sign in your answer and round it up to 2 decimal places)