Which of the Following Statements Regarding CCA Is True

question 27

Multiple Choice

Which of the following statements regarding CCA is true?

• A) Since CCA deduction is not a cash expense, it plays no role in capital budgeting.
• B) The CCA method uses a specific mandated CCA rate for each asset class.
• C) The CCA deduction is equal to the year-end UCC for the pool divided by the mandated CCA rate.
• D) The CCA method allows that the net capital cost of an asset is added to the pool in the year the asset is put in use.

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Definitions:

Rival Firms

Companies that compete against one another in the same market for consumers or resources.

ATC

Average Total Cost, which is the total cost of production divided by the total quantity produced, indicating the average cost per unit.

Territorial Division

The division or partitioning of land or space into separate areas, often for administrative or legal purposes.

Oligopolistic Market

A market structure characterized by a small number of firms that dominate the market, often leading to limited competition.