Given the following information and assuming a CCA rate of 20%, what is the NPV of this project? Initial investment = $400,000; life = five years; before-tax cost savings = $150,000 per year; salvage value = $30,000 in year 5; tax rate = 34%; discount rate = 14%.

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To calculate the Net Present Value (NPV) of this project, we need to consider the cash flows over the project's life, including the initial investment, annual cost savings, tax implications, and the salvage value at the end of the project. The Capital Cost Allowance (CCA) allows for the depreciation of the asset to be deducted from taxable income, which affects the project's net cash flows.1. Initial investment: -$400,0002. Annual before-tax cost savings: $150,0003. CCA rate: 20% (depreciation expense)4. Salvage value: $30,000 in year 55. Tax rate: 34%6. Discount rate: 14%The calculation involves several steps, including determining the depreciation expense, calculating the tax shield, figuring out the after-tax cost savings, and accounting for the salvage value and its tax implications. Finally, we discount these cash flows back to their present value using the 14% discount rate and sum them up to get the NPV.Given the complexity of the calculation and the need for specific financial formulas (e.g., for depreciation, tax savings, and discounting cash flows), the correct answer is based on applying these principles and formulas correctly. The NPV of $27,428 indicates that, after accounting for the cost of capital, the project is expected to add value to the company, making it a financially viable project.

Given the Following Information and Assuming a CCA Rate of 20