What Would the CCA Tax Shields Be for Years 0

question 47

Multiple Choice

What would the CCA tax shields be for Years 0 and 4, assuming these tax shields start in Year 0 and end in Year 4? Remember: CCA = 30%.

• A)$48,000 and $27,989
• B)$52,000 and $0
• C)$120,000 and $69,972
• D)$48,000 and $69,972

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Definitions:

Marginal Productivity Theory

A principle stating that the wage paid to a factor of production, such as labor, will equal the additional output or marginal product that the factor produces.

Marginal Productivity Theory

An economic theory that suggests the value of a good or service is determined by the productive resources involved in its production, emphasizing the contribution of each unit of labor or capital.

Income Distribution

Refers to the way in which total income is shared among the members of a society.

Government Subsidy

A financial contribution provided by the government to individuals, businesses, or other organizations, aimed to support or stimulate economic activity.