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SlamCo is considering the purchase of a new slider for $17,000. The slider will generate...

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Accounting

SlamCo is considering the purchase of a new slider for $17,000. The slider will generate net savings of $3,500 per year over a seven year life, and be salvaged for $1000. SlamCos before tax MARR is 10 per cent annual compounded annually, it is taxed at 40 per cent, and the slider has a 20 per cent CCA rate. (a) What is the companys exact after tax IRR on this investment? Should the investment be made? (b) Should the investment be made?SlamCo is considering the purchase of a new slider for $17,000. The slider will generate net savings of $3,500 per year over a seven year life, and be salvaged for $1000. SlamCos before tax MARR is 10 per cent annual compounded annually, it is taxed at 40 per cent, and the slider has a 20 per cent CCA rate. (a) What is the companys exact after tax IRR on this investment? Should the investment be made? (5 marks)(b) Should the investment be made?

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