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You purchased equipment in 2017 for $120,000 plus it costs $20,000 to have it delivered...

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Accounting

You purchased equipment in 2017 for $120,000 plus it costs $20,000 to have it delivered and installed. You also traded yoour old computer worth $20,000. The old CCA half-year rule still applied. Based on past information, you believe that the equipment will have a salvage value of $19,000 in 6 years. The companys marginal tax rate is 40%. If the assets CCA rate is 20% and the required return on this project is 10%, what is the present value of the tax shield from CCA less the present value of the tax shield lost from salvage?

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