At What Amount Should the Capital Cost Allowance (CCA)tax Shield

question 5

Multiple Choice

At what amount should the capital cost allowance (CCA) tax shield be included in the calculation of the net present value of an investment project?

• A) The amount of the CCA with no adjustment for taxes.
• B) The amount of the CCA multiplied by one minus the tax rate.
• C) The amount of the CCA multiplied by the tax rate.
• D) Zero, since the amount of CCA is not relevant to the calculation of net present value.

---

Definitions:

Canada

A country located in the northern part of North America, known for its vast landscapes, multicultural communities, and bilingual English-French speaking population.

Federal Legislation

Laws enacted by the national government of a country, which supersede state or provincial laws where conflicts arise.

Provincial Legislation

Laws and regulations enacted by the legislative authority of a province or territory in a country.

Fundamental Justice

A principle underlying the legal system that ensures fair legal processes and respect for human rights.