# Since Project A has higher IRR, the NPV of project A is: Project A: CFO = -\$300,000, CF1=\$150,000, CF2=\$150,000, CF3=\$150,000, 1=10% Then Solve for…

I dont get it. How did they get that answer. which formula did they use to get cca in year 1 and cca in year 2. Please explain it well

Since Project A has higher IRR, the NPV of project A is:Project A: CFO = -\$300,000, CF1=\$150,000, CF2=\$150,000, CF3=\$150,000, 1=10%Then Solve for NPV= \$73,027.80Please use the following Information to answer questions 11, 12 and 13.Johnson &amp; Johnson acquires a depreciable asset at a cost of \$730,000 that has a useful life o5 years and a salvage value of \$100,000. The company has a tax rate of 30% and the assetfalls into a 12% CCA class. The acquisition of the asset would result in annual pre-tax savingsPage 5 | 18ADMS 3530 3.0FINAL EXAM, TYPE Xof \$275,000 in each of the 5 years starting in year 1. The acquisition of the asset requires anFALL 2016investment in working capital of \$32,500 at t=0 which is fully recovered in year 5. The companyis required to earn a minimum rate of return of 10%.11. What is the CCA in Year 2?A) \$186, 150B) \$ 87,600C) \$ 43,800D) \$ 77,088E) \$ 82,344Solution: ECCA in Year 1 = \$730,000 * .12 * 1/2 = \$43,800CCA in Year 2 = (\$730,000 – \$43,800) * .12 = \$82, 34412. What is the Present Value of CCA Tax Shield?aciandMacBook Air