The Capital Cost Allowance (CCA)tax Shield of a Class 7

question 100

Multiple Choice

The capital cost allowance (CCA) tax shield of a Class 7 asset with a maximum 15% CCA rate was $12,000 for Year 2.The income tax rate was 40%.What was the total CCA deduction for the asset for Year 2?

• A) $12,000.
• B) $20,000.
• C) $30,000.
• D) $80,000.

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Definitions:

Economic Capital

The assets or resources that an individual or entity has, which can be used to produce economic value.

Norms

Shared expectations or rules within a culture or society that guide and constrain behavior, establishing standards of conduct.

Stratification

The hierarchical arrangement of individuals or groups in a society based on wealth, power, status, or other criteria that leads to unequal access to resources and opportunities.

United States

A federal republic consisting of 50 states, a federal district, five major self-governing territories, and various possessions, known for being a leading world economic and military power.