If the Lease Payments of the $800,000 Asset Were $210,000

question 30

Multiple Choice

If the lease payments of the $800,000 asset were $210,000, first payment occurring at the beginning of the first year when the lease is signed, and tax rate is 40%.What would the CCA tax shields be for Years 0 and 4, assuming these tax shields start in Year 0 and end in Year 4? Remember: CCA = 30%.

• A)$48,000 and $27,989
• B)$52,000 and $0
• C)$120,000 and $69,972
• D)$48,000 and $69,972

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