Spherical Manufacturing recently spent $15 million to purchase some equipment used in the manufacture of...
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Accounting
Spherical Manufacturing recently spent $ million to purchase some equipment used in the manufacture of disk drives. This equipment has a CCA rate of andSphericals marginal corporate tax rate is
a What are the annual CCA deductions associated with this equipment for the first fiveyears
b What are the annual CCA tax shields for the first fiveyears
c What is the present value of the first five CCA tax shields if the appropriate discount rate is peryear
d What is the present value of all the CCA tax shields assuming the equiment is never sold and the appropriate discount rate is peryear
e How might your answer to partd change if Spherical anticipates that its marginal corporate tax rate will increase substantially over the next fiveyears
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