Suppose a Machine That Costs $80,000 Has a Useful Life

question 28

Multiple Choice

Suppose a machine that costs $80,000 has a useful life of ten years.Also suppose that capital cost allowance (CCA) deduction on the machine is $8,000 in year 4.The tax rate is 40%.What would be the tax savings from the CCA tax shield in year 4?

• A) $4,800 outflow.
• B) $3,200 outflow.
• C) $3,200 inflow.
• D) $4,800 inflow.

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Definitions:

Quality Loss Function

A mathematical formula that represents the cost of deviating from a product's target performance, emphasizing that this cost increases exponentially as the deviation grows.

Customer Dissatisfaction

The state of being unhappy or displeased with a product or service, often leading to complaints or loss of business.

TQM Tool

A methodology or tool used in Total Quality Management to improve the quality of products and processes by integrating all organizational functions and processes.

Benchmarking

The act of evaluating business operations and performance indicators against the standards of the industry or exemplary practices from different organizations.