A New Machine Will Cost $1,800,000

question 8

Multiple Choice

A new machine will cost $1,800,000.It is in a CCA class pool that uses a declining balance rate of 30%.The company's tax rate is 38% and it requires a 9% 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)$153,577.98
• B)$188,256.88
• C)$167,400.00
• D)$94,128.44
• E)$102,600.00

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Definitions:

Walter Cannon

A physiologist known for coining the term "fight or flight response" and his work on homeostasis.

Fight-Or-Flight Response

A biological response triggered by an apparent harmful occurrence, assault, or danger to one's continued existence.

Emotion-Focused Coping

Attempting to alleviate stress by avoiding or ignoring a stressor and attending to emotional needs related to our stress reaction.

Adaptation-Level Phenomenon

Our tendency to form judgments (of sounds, of lights, of income) relative to a neutral level defined by our prior experience.