Better Products Ltd

question 72

Multiple Choice

Better Products Ltd.had annual net income of $20,000, CCA of $40,000, a 40 percent tax rate, a discount rate of 10 percent and annual cash sales of $200,000.The depreciable assets of Better Products belong in several different classes under the Income Tax Act, have a salvage value of zero at the end of six years, and were all bought new at the beginning of Year 1.What is the tax saving from CCA?

• A)$16,000
• B)$24,000
• C)$36,000
• D)$56,000
• E)$14,400

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Definitions:

Proportion

The relationship between parts and the whole, often expressed as a ratio or fraction, indicating the relative size or importance of elements within a context.

Services Sector

Part of the economy that provides intangible goods or services to consumers, including sectors like healthcare, education, and financial services.

Intangibility

A characteristic of services indicating they cannot be seen, touched, or physically measured, making their quality and customer satisfaction more subjective.

Professional Carpet Cleaning

The service provided by experts who use specialized equipment and techniques to deeply clean carpets beyond what regular maintenance can achieve.