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Hydro One is evaluating buying two different transforms. Ø Transformer #1: costs $370,000 has a 3...

Hydro One is evaluating buying two different transforms. Ø Transformer #1: costs $370,000 has a 3 year life, has pre-tax operating cost of $80,000 per year. Ø Transformer #2: costs $475,000 has a 5 year life, has pre-tax operating cost of $30,000 per year. Ø Both transformers are Class 8 (CCA rate of 20% per year) and both have a savage value of $40,000. The firm’s tax rate is 35% and discount rate is 10% What is the PVCCATS for Transformer #1

? Select one: a. $63,874.46 b. $45,584.32 c. $52,247.56 d. $75,396.82 e. None of these

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