Calculate the CSF and CTF Given the Following Information: the Before-Tax

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The Answer is First, it is necessary to calculate the after-tax interest rate as follows:
i = 0.1 * (1-0.45)= 0.055
The two capital cost tax factors are defined as follows:
CSF = 1 -

First, it is necessary to calculate the after-tax interest rate as follows: i = 0.1 * (1-0.45)= 0.055 The two capital cost tax factors are defined as follows: CSF = 1 - = 1 - = 0.631 CTF = 1 - = 1 - )= 0.641 In the above formulas, d is the CCA rate. The CTF is higher which means less tax savings under the current Canadian Capital Cost Allowance system. This is due to the Half-Year Rule introduced on November 13, 1981 to prevent fast depreciation of an asset in its first year.

= 1 -

= 0.631
CTF = 1 -

= 1 -

)= 0.641
In the above formulas, d is the CCA rate. The CTF is higher which means less tax savings under the current Canadian Capital Cost Allowance system. This is due to the Half-Year Rule introduced on November 13, 1981 to prevent fast depreciation of an asset in its first year.

Calculate the CSF and CTF Given the Following Information: the Before-Tax

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