Melvin, Otto, and Clapman consulting firm is considering the purchase of a new telephone system for $10,000. It is believed that the new equipment will save $750 a year over current costs. Telephone equipment is included in Class 3 for tax purposes. Class 3 CCA rate is 5%. The new equipment has an estimated life of five years. Its salvage value is estimated at $400 at the end of five years.
Required:
What items must be considered in the analysis of the purchase?

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The Answer of Melvin, Otto, and Clapman consulting firm is considering the purchase of a new telephone system for $10,000. It is believed that the new equipment will save $750 a year over current costs. Telephone equipment is included in Class 3 for tax purposes. Class 3 CCA rate is 5%. The new equipment has an estimated life of five years. Its salvage value is estimated at $400 at the end of five years.
Required:
What items must be considered in the analysis of the purchase?

Melvin, Otto, and Clapman Consulting Firm Is Considering the Purchase