A piece of equipment, acquired in Year 1, belongs to Class 7 with a maximum CCA rate of 15%. The income tax rate is 40%. The tax savings (before discounting) from the CCA tax shield were $2,830.50 for Year 3. The after-tax cost of capital is 10%.
- What is the approximate undepreciated capital cost (UCC)balance for the equipment at the beginning of Year 3?
A) $7,076.
B) $8,325.
C) $31,450.
D) $47,175.

Question

Quizplus · Accepted Answer

The Answer of  A piece of equipment, acquired in Year 1, belongs to Class 7 with a maximum CCA rate of 15%. The income tax rate is 40%. The tax savings (before discounting) from the CCA tax shield were $2,830.50 for Year 3. The after-tax cost of capital is 10%.
- What is the approximate undepreciated capital cost (UCC)balance for the equipment at the beginning of Year 3?
A) $7,076.
B) $8,325.
C) $31,450.
D) $47,175.

A Piece of Equipment, Acquired in Year 1, Belongs to Class