Kaywinnet Inc. is currently assessing whether it should purchase a new robotic production line. The...
80.2K
Verified Solution
Link Copied!
Question
Accounting
- Kaywinnet Inc. is currently assessing whether it should purchase a new robotic production line. The new robotic line will cost $2,750,000 and last 10 years. The equipment qualifies for a CCA rate of 30%. It also qualifies for the Accelerated Investment Incentive with 1.5 times CCA allowed in the year of acquisition. The companys current cost of capital for this project is 10% and its income tax rate is 28%. What is the present value of the CCA tax shield from purchasing the new robotic production line?
a) $577,500
b) $603,750
c) $635,526
d) $644,135
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.