Kane Company Is in the Process of Purchasing a New

question 4

Multiple Choice

Kane Company is in the process of purchasing a new machine for its production line.It is near the end of the year,and the machine is being offered at a special discount if purchased before the end of the year.Kane has determined that the capital cost allowance (CCA) deduction on the new machine for the year of purchase would be $13,000.The tax rate is 30%.If Kane purchases the machine and reports a positive net income for the year,what would be the tax savings from the CCA tax shield related to this machine for the year of purchase?

• A) $0.
• B) $3,900.
• C) $9,100.
• D) $13,000.

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Definitions:

Reinforcement

In behavioral psychology, it is any stimulus which strengthens or increases the probability of a specific response.

Response

The reaction or reply to a stimulus or situation in the environment, often studied in psychology to understand behavior.

Operants

Behaviors that are modified by their consequences, a concept central to operant conditioning theory in psychology.

Elicited Behaviors

Elicited behaviors are responses produced automatically by a specific stimulus, often instinctual and not learned through experience.