question archive The Shell Corporation has a 34% tax rate and owns a piece of petroleum-drilling equipment that costs $128,400 and will be depreciated at a CCA rate of 30%
The Shell Corporation has a 34% tax rate and owns a piece of petroleum-drilling equipment that costs $128,400 and will be depreciated at a CCA rate of 30%
Subject:EconomicsPrice: Bought3
The Shell Corporation has a 34% tax rate and owns a piece of petroleum-drilling equipment that costs $128,400 and will be depreciated at a CCA rate of 30%. Shell will lease the equipment to others and each year receive $48,500 in rent. At the end of five years, the firm will sell the equipment for $32,000. All values are presented in today's dollars.
Calculate the overall present worth of these cash flows with tax effects if market interest rate is 10% and annual inflation rate is 2%.
