A Piece of Equipment Is in Class 7 with a Maximum

question 47

Multiple Choice

A piece of equipment is in Class 7 with a maximum CCA rate of 15%.The income tax rate is 40%.The tax savings from the CCA tax shield on this equipment for the first year was $1,500.What must have been the original capital cost of the equipment?

• A) $3,750.
• B) $25,000.
• C) $33,333.
• D) $50,000.

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Definitions:

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The total revenue generated from the sale of goods or services before any deductions are made for returns, allowances, or discounts.

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