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is considering the purchase of a wind mill that costs $500,000 and produces before-tax operating cash flows (excluding CCA tax shields) of $130,000...
rate is 15% (declining balance method) and the half-year rule applies. The discount rate is 12%, the tax rate is 40% and the expected salvage value at the end of 6 years is zero.
1- What is the present value of the after-tax operating cash flows
(excluding CCA tax shield) for years 1 through 6?
2 - What is ABC's CCA tax shield in Year 2?
3 - What is the present value of ABC's CCA tax shields over the life of the project?
4 - What is the overall impact of the changes in working capital on Innovative Energy Co. project's NPV?
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