DogChew Products Needs to Replace Its Rawhide Tanning and Molding

question 141

Multiple Choice

DogChew Products needs to replace its rawhide tanning and molding equipment. It can be used for five years and will have no salvage value. The equipment costs $930,000. The firm can lease it for $245,000 a year, or it can borrow the money to purchase the equipment at 9%. The firm's tax rate is 39%. The CCA rate is 20% (Class 8) .

What is the present value of the depreciation tax shield?

• A) $26,876
• B) $277,177
• C) $186,000
• D) $84,074
• E) $120,888

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Definitions:

Interpersonal Problems

Difficulties or conflicts in interactions between individuals in various settings, including personal relationships, workplaces, and social contexts.

Prosocial Behaviors

Actions that are undertaken to benefit others, such as helping, sharing, and comforting, indicative of empathy and moral development.

Inductive Techniques

Methods of reasoning that derive general principles from specific observations or instances.

Permissive Parenting

A parenting style characterized by a high level of warmth and affection with low demands or control over the child’s behavior.