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:

Infants

Very young children or babies, typically from birth until around 2 years of age, characterized by rapid physical and cognitive development.

Psychosexual Development

Freud's theory describing how personality develops through stages of sexual pleasure focusing on different body parts.

Superego-Phallic

Refers to a psychoanalytic concept where the superego (conscience or moral standards) develops during the phallic stage of psychosexual development.

Ego-Latency

A period in development where the ego begins to develop, leading to more advanced social and emotional skills; often associated with Freudian psychology.