ABC company is considering the acquisition of machine which belongs to a class with CCA rate of
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Question:
ABC company is considering the acquisition of machine which belongs to a class with CCA rate of 40%. The cost of the machine is $1,188,000. The expected economic life is 7 years. Salvage value is $150,000. The discount rate is 6.60% and the marginal tax rate is 20%. Assume the half-year rule applies. What is the CCA tax shield for year 2?
a.
$190,080
b.
$76,032
c.
$380,160
d.
$57,024
e.
$285,120
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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