Calculate the Tax-Adjusted User Cost of Capital of a Machine

question 4

Multiple Choice

Calculate the tax-adjusted user cost of capital of a machine that costs $10,000 and depreciates at a rate of 10%,when the real interest rate is 3% and the tax rate on revenue is 5%.

• A)$1238
• B)$1300
• C)$1368
• D)$1800

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Definitions:

Charter

A legal document or authorization establishing a corporation or municipality and defining its rights and privileges.

Transfer-Payment Schemes

Governmental distributions of money without corresponding provision of goods or services, often aimed at achieving social or economic policy objectives.

Constitutional Rigidity

The characteristic of a constitution that makes it difficult to amend or modify.

Charter Of Rights And Freedoms

A foundational legal document that guarantees fundamental freedoms and rights to the citizens in a country.