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11. Champlain Transportation Inc. is considering a five-year project that requires an initial capital investment of...

11. Champlain Transportation Inc. is considering a five-year project that requires an initial capital investment of $1 million. The project is expected to generate operating revenue of $500,000 per year, and the associated operating expenses are estimated at $250,000 per year. The capital asset belongs to asset class 9, which has a CCA rate of 30 percent. The firm’s tax rate is 35 percent. What is the after-tax cash flow for year 1?

a. $110,000

b. $215,000

c. $302,500

d. $312,500

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Answer #1

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­SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

HALF YEAR RULE APPLIES. SO DEPRECIATION WILL BE 50% OF TOTAL DEPRECIATION

ANSWER : b

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