One Can Continue to Earn CCA Tax Shields from an Asset

question 27

Multiple Choice

One can continue to earn CCA tax shields from an asset sold from an existing pool if:

• A)UCC is positive and greater than salvage.
• B)salvage is positive.
• C)the present value of the tax shields is negative.
• D)the tax bracket is greater than 50 percent.

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Definitions:

Equity Principle

A concept in finance that emphasizes fair distribution of wealth and assets, ensuring that financial transactions are conducted fairly and equitably.

Taxes

Mandatory financial charges or levies imposed by a government on individuals or businesses to fund public expenditure.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to taxation, meaning all taxpayers pay the same percentage of their income.

Regressive Tax

A tax applied uniformly, taking a larger percentage of income from low-income earners compared to high-income earners.