A small Canadian house-framing company decides to purchase new scaffolding equipment to increase their construction efficiency. The new scaffolding equipment provides an annual benefit of $6,000 but the company will need to pay to store the equipment in the winter months - this will cost $2,500 each year. The equipment is in an asset class with a CCA rate of 25% and the company's tax rate is 40%. The company paid $10,000 to purchase the equipment. a) Construct basic Income Statements' for Year 1 and Year 2 related to the cash flows associated with the purchase of the new scaffolding. Include tax and depreciation on the statements. (6-marks) b) What are the company's tax savings in year 1 and year 2 as a result of the purchase of the scaffolding? (2-marks) c) If the company sells the scaffolding at the beginning of Year 3/end of Year 2 for $5,000, what is the difference between this selling price and the book value of the equipment? Has the company claimed too much or too little CCA as determined by the market resale value? (2- marks) ce aro. A small Canadian house-framing company decides to purchase new scaffolding equipment to increase their construction efficiency. The new scaffolding equipment provides an annual benefit of $6,000 but the company will need to pay to store the equipment in the winter months - this will cost $2,500 each year. The equipment is in an asset class with a CCA rate of 25% and the company's tax rate is 40%. The company paid $10,000 to purchase the equipment. a) Construct basic Income Statements' for Year 1 and Year 2 related to the cash flows associated with the purchase of the new scaffolding. Include tax and depreciation on the statements. (6-marks) b) What are the company's tax savings in year 1 and year 2 as a result of the purchase of the scaffolding? (2-marks) c) If the company sells the scaffolding at the beginning of Year 3/end of Year 2 for $5,000, what is the difference between this selling price and the book value of the equipment? Has the company claimed too much or too little CCA as determined by the market resale value? (2- marks) ce aro