Maritimes Toy Corporation (MTC)is considering investing in a piece of new equipment worth $105,000.The equipment will increase operating revenue by $12,000 per year for ten years.The equipment is expected to have a salvage value of $6,500 at the end of ten years, and capital cost allowance is claimed at 20% on a declining balance.An initial investment in working capital of $8,000 is estimated for this investment.The corporate tax rate is 38%, and MTC's opportunity cost of capital is 9%.Assume the asset class remains open after the asset is sold and the accelerated investment incentive is applicable for CCA in year 1? The project's NPV is approximately

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The Answer of Maritimes Toy Corporation (MTC)is considering investing in a piece of new equipment worth $105,000.The equipment will increase operating revenue by $12,000 per year for ten years.The equipment is expected to have a salvage value of $6,500 at the end of ten years, and capital cost allowance is claimed at 20% on a declining balance.An initial investment in working capital of $8,000 is estimated for this investment.The corporate tax rate is 38%, and MTC's opportunity cost of capital is 9%.Assume the asset class remains open after the asset is sold and the accelerated investment incentive is applicable for CCA in year 1? The project's NPV is approximately

Maritimes Toy Corporation (MTC)is Considering Investing in a Piece of New