Jasper Manufacturing Is Starting a New Project Which Will Require

question 161

Multiple Choice

Jasper Manufacturing is starting a new project which will require the acquisition of new fixed assets costing $127,000. The assets will have a 5-year life after which time they will be worthless. The
Assets belong in a 25 percent CCA class. The assets can be leased for $27,900 a year. The firm can
Borrow money at 11 percent and has a 34 percent tax rate. What is the amount of the depreciation
Tax shield in year 3?

• A) $7,084
• B) $9,486
• C) $11,222
• D) $12,818
• E) $13,265

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Definitions:

Anger

A strong feeling of annoyance, displeasure, or hostility.

Coronary Heart Disease

A condition characterized by reduced blood flow to the heart muscle due to the build-up of plaque in the coronary arteries, leading to heart attacks.

Secondary Control

A coping mechanism that involves adjusting one's own goals and efforts to deal with situations that are beyond one's control.

Attitude

A settled way of thinking or feeling about someone or something, typically reflected in a person's behavior.