I need calculation details with the answer for question number 32. reference question is 31.

31. If the lease payments of the $800,000 asset were $210,000, first payment occurring at the beginning of the first year when the lease is signed, and tax rate is 40%. What would the CCA tax shields be for Years 0 and 4, assuming these tax shields start in Year 0 and end in Year 4? Remember: CCA = 30%. A. $48,000 and $27,989 B. $52,000 and $0 C. $120,000 and $69,972 D. $48,000 and $69,972

Explanation:

We have CCA at 30% but initially in year 0 we take half of it ie.15%

Now After computing CCA we know tax shield is simply tax rate which is 40% multiplied by the CCA

Hence in year 0,

We have CCA = 15% x 800000 = 120,000 and tax shield = CCA x 40% = 120000 x 40% = 48000

The detailed calculation is as attached

	0	1	2	3	4
Particulars	8,00,000	680,000	476,000	333,200	233,240
	15%	30%	30%	30%	30%
CCA	120,000	204,000	142,800	99,960	69,972
Tax shield(40%)	48000				27,989

32. If the lease payment for the machine in Question 31 above were made in advance, starting at the beginning of the first year of the contract, what would the size of such a payment now be as an equivalent annual cost? A. $71,455 B. $14,644 C. $15,533 D. $15,816

Explanation: