A Textile Company Invests $12 Million in an Open-End Spinning

question 91

Multiple Choice

A textile company invests $12 million in an open-end spinning machine.The machine belongs to asset class 43 and has a capital cost allowance (CCA) rate of 30%.If the company sold it immediately after the end of year 3 for $8 million,what would be the overall present value of the CCA tax shields from this asset,given a tax rate of 40%,and a cost of capital of 12%?

• A)$912,310
• B)$1,076,346
• C)$1,617,972
• D)$2,432,211
• E)$3,244,898

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Definitions:

Trait Visibility

The extent to which a personality trait is observable or detectable by others in social contexts.

Self-Monitoring

The practice of observing and regulating one's own behavior in social situations to fit social norms or achieve personal goals.

Agency

The capacity of individuals to act independently and make their own free choices, uninfluenced by external forces.

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The degree to which different judges or observers agree in their assessments.