Find the NPV -company considering new car that will cost 1m -it will save 275,000 a...

Find the NPV -company considering new car that will cost 1m -it will save 275,000 a year in costs -car will last for 5 yrs, depreciated at a CCA rate of 20%. -car salvage value is 50,000 at the end of yr 5 -no impact on net working capital -margin tax rate is 40%. -required return is 8%

use formula or finance calculator to show work

Expert Solution

Tax Benefit on loss on sale of Car = (Cost - Accumulated Depreciation - Sale Value) * 40%

Tax Benefit on loss on sale of Car = (1000000 - 672320 - 50000) * 40%

Tax Benefit on loss on sale of Car = $111072

jeff jeffy answered 2 years ago

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