Laurentide Resort Corporation Is Considering a Seven-Year Project That Requires

question 98

Multiple Choice

Laurentide Resort Corporation is considering a seven-year project that requires an initial investment of $525,000 and generates annual after-tax operating cash flow of $225,000.The asset has a CCA rate of 30 percent and an expected salvage value of $65,000.The firm's marginal tax rate is 40 percent.What is the CCA tax savings for year 5?

• A) $15,126
• B) $18,368
• C) $37,816
• D) $45,919

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Definitions:

U-1 Measure

A specific metric for unemployment that counts individuals who have been unemployed for 15 weeks or longer, indicating long-term unemployment.

U-6 Measure

A comprehensive unemployment rate that includes those who are not actively looking for work, those working part-time but seeking full-time employment, and other marginally attached workers, in addition to the unemployed who are actively looking for work.

Marginally Attached Workers

Individuals who are not in the labor force, wishing to be employed and have looked for a job in the recent past but are not currently looking for work.

Labor-Force Participation

The ratio or percentage of the working-age population that is actively employed or seeking employment.