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Question: Benson Inc. is considering a new project in British Columbia, new equipment with a cost $190,000. For the upcoming year, they estimate that the project will produce sales of $450,000 and $290,000 in operating costs. The CCA rate will be 20 percent and their net profits will be taxed at a corporate rate of 35 percent.

a) What is the depreciation?

b) Using the top-down approach, what is the operating cash flow?

c) Using the tax shield approach, what is the operating cash flow?

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