A Company Buys Tracking Software for Its Warehouse Which,along with the Computer

question 34

Multiple Choice

A company buys tracking software for its warehouse which,along with the computer system and ancillaries to run it,will cost $1.8 million.The new equipment and software falls under asset class 50 and has a capital cost allowance (CCA) rate of 55%.It is expected that the software will reduce inventory by $10.5 million at the end of the first year after it is installed,though there will be an annual cost of $120,000 per year to run the system.If the company's marginal tax rate is 40%,how will the purchase of this item change the company's free cash flows in the first year?

• A)$10,020,000
• B)$10,278,000
• C)$10,422,000
• D)$10,566,000
• E)$10,578,000

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Definitions:

Referential Style

A communication style predominant in early language development where children primarily use language to label objects.

Communicating Style

The characteristic manner in which an individual expresses themselves or exchanges information with others.

Fast Mapping

is the cognitive process by which children are able to learn new words or concepts with minimal exposure, demonstrating the rapid acquisition of language in early development.

Pragmatic Speech

The aspect of spoken language that involves understanding and using language socially and appropriately in different contexts.