On January 1, 2010 Hudson Semiconductor Limited acquired a new wafer pressing machine at a cost of $500,000. The estimated economic life of this machine is 10 years, at which time it can be sold for $10,000 scrap value. Hudson uses the straight-line depreciation method. This machine qualifies for a capital cost allowance of 30%. The corporate tax rate is 35%.
Required:
(a) Calculate the amount of depreciation expense for 2010.
(b) Calculate the capital cost allowance for 2010.
(c) How much tax saving did Hudson receive in 2010 as a result of purchasing the new machine?