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LaMont and Sons Is Considering the Purchase of Some Wood

question 18

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LaMont and Sons is considering the purchase of some wood lathes for $229,001. These lathes belong in a 30% CCA class. The firm expects that it will be able to sell the machines for $49,500 in
Four years' time. What is the present value of the CCA tax shield on this equipment if the tax rate is
34% and the relevant discount rate is 12%?


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