ECOR3800/2022 Problem Set #7 Page 2/2 2. (20 marks) A companys first- and second-year operations can be summarized as follows: Revenues ($/year) = $110 000 Expenses ($/year) (except CCA): $65 000 Capital asset purchases in the first year totaled $100 000, and none in the second year. a) With a CCA rate of 20% and a tax rate of 55%, how much income tax was paid in year 1? b) With a CCA rate of 20% and a tax rate of 55%, how much income tax was paid in year 2?

NOTE: there's no capital asset purchases in the second year