Use the Information Below to Answer the Following Question(s)

question 143

Multiple Choice

Use the information below to answer the following question(s) .Albernie Ltd.purchased a CCA Class 8 (CCA rate of 20%) item of equipment for $90,000.The equipment was the only item in the Class 8 capital cost allowance pool.The equipment is expected to generate savings in the amount of $40,000 per year.The company uses straight-line depreciation, estimates a 3 year useful life with $20,000 salvage value for the new equipment.The tax rate is 35%, and Albernie has a required rate of return of 9.0%.
-What is present value of the after-tax savings that Albernie Ltd.expects during the useful life of the equipment?

• A)$65,814
• B)$101,252
• C)$81,257
• D)$50,370
• E)$42,188

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Definitions:

Damaging

Damaging refers to causing physical harm, deterioration, or depreciation in value or function.

Manslaughter

The unlawful killing of an individual without malice aforethought, which can be voluntary, under certain circumstances, or involuntary, through reckless behavior.

Premeditation

The act of planning or considering an action, especially a crime, beforehand.

School Zone

A designated area around a school where speed limits are reduced and traffic rules are strictly enforced to enhance safety for students and pedestrians.