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A question in relation of capital budgeting for a 10 yearproject.Say the tax rate for below question is 35%.The buildings cost $200 000 have an estimated life of 20 yearsat which time their salvage value would be zero. They are to bedepreciated on a straight line (prime cost) basis for tax purposesbased on this life. The salvage value of the buildings after 10years is expected to be $50,000.The equipment cost $400 000 has an estimated life of 10 yearsand a zero salvage value. The equipment is to be depreciated on astraight line (prime cost) basis for tax purposes based on thislife.What are the tax implications? Is there is gain or loss and howwould you account for this in year 10 of the cash flow. Could youprovide an example.