A fiRm Purchases Class 8 Equipment for $1,000,000 (CCA Rate

question 89

Multiple Choice

A firm purchases Class 8 equipment for $1,000,000 (CCA Rate 20%) for a 10 year project. What will be the CCA tax shield in year 3? The tax rate is 35%.

• A) $144,000
• B) $50,400
• C) $201,600
• D) $63,000
• E) $35,000

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Definitions:

Test Statistic

A value calculated from sample data to evaluate a hypothesis in statistics.

Wald Statistic

A statistic used to test the significance of individual coefficients in the context of a larger model.

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An organic compound produced in muscles during intense activity and in fermentation processes, associated with muscle fatigue and sour tastes.

Logistic Regression

A statistical method for analyzing a dataset in which there are one or more independent variables that determine an outcome, typically used for prediction of binary outcomes.