REMAX inc. is choosing his company house. House A costs $120,000 initially, the operating expenses total to $23,000 per year and has a 4-year life, after which it will sell for $24,000. House B on the other hand costs $144,000 initially, the operating expenses total to $28,000 per year and has a 3-year life after which it will sell for $17,000. The corporate tax rate is 40%. The CCA rate is 40%, and you assume a required rate of return of 12% in this case. What are the EACs?

Answer rating: 100% (QA)

Calculation of CCA Costs on the Houses House A Year Starting UCC CCA 40 Closing UCC Salvage Capital ... View the full answer