Layton Company Is Replacing an Old Delivery Van with a New

question 51

Multiple Choice

Layton Company is replacing an old delivery van with a new van. The following data relate to this investment decision:

The old van is in Class 10 with a maximum CCA rate of 30% and will last for six more years. The new van is also in Class 10 with a maximum CCA rate of 30%. The income tax rate is 40%, and the company's after-tax cost of capital is 10%.
-What is the approximate present value of the after-tax net savings in cash operating costs for all the years?

• A) $3,484.
• B) $5,226.
• C) $8,711.
• D) $12,000.

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Definitions:

Crawls on All Fours

Crawling on all fours is a developmental stage where infants move on their hands and knees before learning to walk.

Uses Arms to Pull Body

A description of an action where an individual relies on their arms for mobility or movement, often seen in conditions where leg function is impaired.

Immunizations Neglected

Refers to situations where necessary vaccinations are not administered, leaving individuals and communities at higher risk for infectious diseases.

Incomplete

Not finished; lacking some parts or elements.