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

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Definitions:

Sterile Field

A specific area that is free of all microorganisms to maintain asepsis during surgical procedures and other sensitive medical tasks.

Specimen Preservation

The process of maintaining the integrity of a biological sample for later analysis or examination.

10% Formalin

A solution commonly used as a disinfectant and preservative in the medical and biological sciences, consisting of 10% formaldehyde in water.

Laboratory Examination

A clinical test conducted in a laboratory to analyze samples and diagnose conditions.