Payson Company bought $40,000 worth of office equipment at the beginning of Year 1. This equipment has a useful life of eight years and a salvage value at the end of its useful life of $4,000. This equipment is in Class 7 with capital cost allowance (CCA) rate of 15%. The income tax rate is 40%.
- What is the maximum amount of CCA that the company will be able to deduct for tax purposes for Year 2?
A) $4,995.
B) $5,100.
C) $5,550.
D) $6,000.

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The Answer of  Payson Company bought $40,000 worth of office equipment at the beginning of Year 1. This equipment has a useful life of eight years and a salvage value at the end of its useful life of $4,000. This equipment is in Class 7 with capital cost allowance (CCA) rate of 15%. The income tax rate is 40%.
- What is the maximum amount of CCA that the company will be able to deduct for tax purposes for Year 2?
A) $4,995.
B) $5,100.
C) $5,550.
D) $6,000.

Payson Company Bought $40,000 Worth of Office Equipment at the Beginning