An Asset with a Purchase Cost of $112 500 and a CCA

question 52

Multiple Choice

An asset with a purchase cost of $112 500 and a CCA rate of 20% has a market value of $7 500 at the end of its 12-year life. Assume this asset is the only asset in its class. Which of the following statements about this situation is correct?

• A) There is a recapture of $5 111
• B) There is a terminal loss of $6 054
• C) There is a recapture of $2 218
• D) There is a terminal loss of $3 372

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Definitions:

Offshoring

The practice of relocating business processes or production to a foreign country to reduce costs or take advantage of favorable conditions.

Canadian Firms

Companies that are incorporated in Canada, governed by Canadian law, and typically operate within Canadian markets.

Overseas Locations

Refers to business operations or facilities of a company that are located outside its home country.

Rehire Retirees

The practice of bringing retired workers back into the workforce, either on a full-time, part-time, or consultancy basis.