Manti Company Purchased a New Machine on January 2, Year

question 132

Multiple Choice

Manti Company purchased a new machine on January 2, Year 1. Cost and other data relating to the machine follow:
$\begin{array}{|l|r|}\hline \text { Cost of Machine } & \$ 140,000 \\\hline \text { Salvage Value } & \$ 20,000 \\\hline \text { Useful Life } & 12 \text { years } \\\hline\end{array}$
The machine is in Class 7 with a maximum $15 \%$ CCA rate. Manti uses an after-tax discount rate of $12 \%$ for capital budgeting decisions. The income tax rate is $40 \%$ .
- If Manti deducts the maximum CCA for tax purposes,what will be the approximate present value (as of January 2,Year 1) of the CCA tax shield for Year 2?(Do not round your intermediate calculations.)

• A) $6,194.
• B) $7,700.
• C) $9,291.
• D) $19,425.

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Definitions:

Situational Contingency

A concept in management stating that the effectiveness of a decision or approach depends on the specific circumstances or situation at hand.

Servant Leadership

A leadership philosophy which emphasizes the leader's key role as serving the needs of others, prioritizing the well-being and development of team members.

Leadership Styles

The various approaches to leadership that management may use to interact with employees, make decisions, and motivate people, including autocratic, democratic, transformational, and laissez-faire styles.

Three-Dimensional Style

A design or artistic style that gives the illusion of depth and volume, creating a lifelike appearance.