If a Leased Asset Were Scrapped from a Continuing CCA

question 65

Multiple Choice

If a leased asset were scrapped from a continuing CCA pool after four years, and its UCC were $10,000 and its salvage is zero, what would the present value of this asset's tax shelter be if the appropriate after-tax borrowing rate is 9%, the CCA rate is 20%, and the tax rate is 40%?

• A)- $2,759
• B)- $1,955
• C)+ $10,000
• D)+ $2,759

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Definitions:

Passive-Aggressive

A behavior pattern characterized by indirect resistance to the demands of others and an avoidance of direct confrontation, as in procrastinating, harboring secret feelings of resentment, or being sullen.

Avoidant

Pertaining to a behavior or personality style characterized by the avoidance of intimacy, social interaction, or confrontation.

Ambivalent

Having mixed feelings or contradictory ideas about something or someone.

Anxiously Attached

A type of attachment style characterized by anxiety about relationships and a fear of abandonment.