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14) Parappapa is considering an eight-year expansion project that requires an initial investment of $423,000 for the purchase of a new capital asset...

14) Parappapa is considering an eight-year expansion project that requires an initial investment of $423,000 for the purchase of a new capital asset with a CCA rate of 30 percent. The costs to install the asset are $27,000. The projected annual sales revenue and costs are $1.2M and
$700,000 per year, respectively. The appropriate discount rate is 15 percent. The firm’s
marginal tax rate is 35 percent. What is the fourth year CCA expense?

a) $46,305.0
b) $56,227.5
c) $131,197.5
d) $154,351.0
e) $187,425.0
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