Scenario Analysis (Medium)
Suppose you have a project which requires an initial investment (in a piece of equipment) of
$200,000. The equipment has a CCA rate of 0.3. The project will last 3 years. At the end of year
3, the equipment will be sold for $35,000. The project will reduce production cost by $110,000
per year. The initial working capital requirement is $25,000. An additional amount of $8,000 is
required for year 1. All will be recovered at the end of year 3.