A Machine Is Purchased for $500,000 and Is Used Through

question 17

Multiple Choice

A machine is purchased for $500,000 and is used through the end of Year 2.The machine falls under asset class 43 with a capital cost allowance (CCA) rate of 30%.At the end of Year 2,the machine is sold for $75,000.What is the present value of the overall CCA tax shields if the firm's marginal tax rate is 40% and its cost of capital is 5%?

• A)$232,128
• B)$201,334
• C)$175,997
• D)$167,347
• E)$144,023

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Definitions:

Baby Boomer Market

The demographic group born between 1946 and 1964, often targeted by marketers for their significant purchasing power.

Marketing Efforts

Activities and strategies implemented by a company to promote and sell its products or services, including advertising, sales promotions, public relations, and direct marketing.

Baby Boomers

The demographic cohort following World War II, typically defined as those born from 1946 to 1964.

Recent Retiree

An individual who has recently ended their professional career or period of employment, entering into retirement.