A New Machine Will Cost $500,000

question 33

Multiple Choice

A new machine will cost $500,000.It is in a CCA class pool that uses a declining balance rate of 30%.The company's tax rate is 40% and it requires a 15% rate of return on investments.Calculate the present value of the the tax shield the first year assuming the savings occur at year end.

• A)$126,998.42
• B)$78,214.34
• C)$52,173.91
• D)$119,765.22
• E)$26,086.96

Interpret the law of comparative advantage and its implications for productivity and trade.

Analyze scenarios to determine individuals’ or countries’ comparative and absolute advantages.

Understand the concept of absolute and comparative advantage in economic transactions.

Distinguish between absolute advantage and comparative advantage.

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Definitions:

New Machinery

Refers to recently developed or acquired equipment that is used in manufacturing or production processes.

Effective Usury Laws

Legislation that regulates and limits the amount of interest that can be charged on loans, preventing excessively high rates.

Credit and Loans

Financial products that allow individuals or entities to borrow money, typically with the promise of repayment at a future date along with interest.

Investment-Demand

The relationship showing the amounts of investment goods purchased at different rates of interest.