Cameron, Inc

question 160

Multiple Choice

Cameron, Inc. is contemplating the acquisition of some new equipment. The purchase price is $66,000. Assume that the CCA for works out to be 33.33 percent, 44.44 percent, 14.82 percent,
And 7.41 percent of the value over years 1 to 4, respectively. The equipment will be worthless at the
End of that time. The equipment can be leased for $18,000 a year. The firm can borrow money at
8) 5 percent and has a 34 percent tax rate. What is the amount of the CCA tax shield in year 4?

• A) $525.27
• B) $1,624.50
• C) $1,662.80
• D) $3,829.60
• E) $4,890.60

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Definitions:

Efficiency

The ability to accomplish a task or job with a minimum expenditure of time and resources.

Standardization of Work Processes

The practice of establishing uniform procedures and criteria for tasks and operations within an organization to increase efficiency and consistency.

Direct Supervision

A management style where a supervisor closely oversees and controls the work of their subordinates.

Routine Tasks

Repetitive and predictable activities that are part of an individual’s daily work responsibilities.