Calculate the OCF and CCA Tax Shield Given the Following

question 63

Multiple Choice

Calculate the OCF and CCA tax shield given the following information: Sales $900,000; Costs $575,000; Depreciation $200,000. Tax rate is 34%.

• A) OCF = $282,500; CCA tax shield = $68,000
• B) OCF = $287,500; CCA tax shield = $70,000
• C) OCF = $292,500; CCA tax shield = $72,000
• D) OCF = $297,500; CCA tax shield = $74,000
• E) OCF = $302,500; CCA tax shield = $76,000

---

Definitions:

Laboratory Methods

Techniques and procedures used in the controlled settings of a lab to investigate phenomena, conduct experiments, and perform research across various scientific disciplines.

John Watson

A pioneering psychologist best known for his work in establishing the behaviorist school of psychology.

Theory

A coherent group of propositions formulated to explain a group of facts or phenomena, often serving as the basis for further experimentation.

Unobservable Phenomena

Refers to occurrences or aspects that cannot be directly seen or measured, often requiring inference from observable effects.