A New Machine Will Cost $1,800,000

question 10

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 cash savings from 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