Multiple Choice
Scotia Manufacturing Limited is a Nova Scotia based manufacturing company consideringacquiring new machinery worth $66 275. Scotia Manufacturing may purchase the equipment fromtheir supplier or lease it from Atlantic Leasing. The machinery's estimated salvage value after 6 years is estimated at $7 000. Scotia Manufacturing's tax rate is 40%, before-tax borrowing rate 12%, and the CCA rate is 20%. Keeping in mind that Scotia Manufacturing is eligible for the federal Investment Tax Credit (ITC) , what is the present value of the company's cost of purchasing the equipment? Round your final answer to the nearest dollar.
A) $35 739
B) $37 515
C) $39 734
D) $32 866
Correct Answer:
Verified
Correct Answer:
Verified
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