A Firm Is Considering Investing in a New Machine That

question 28

Multiple Choice

A firm is considering investing in a new machine that will cost $600,000 and will be be under asset class 43 with a CCA rate of 30%.If the firm's marginal tax rate is 39%,what is the CCA tax shield in the first year?

• A)$120,000
• B)$35,100
• C)$300,000
• D)$234,000
• E)$90,000

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Definitions:

Pavlov

A Russian physiologist best known for his discovery of classical conditioning through his experiments with animals.

Skinner

B.F. Skinner, an American psychologist, is known for his development of the theory of behaviorism and the concept of operant conditioning.

Respondent Behavior

A behavior that occurs as an automatic response to a certain stimulus, often used in classical conditioning scenarios.

Operant Behavior

Conduct that is regulated through its outcomes, such as incentives and penalties, within the learning environment.