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Machinery costing 120,000 has a 4 year life and a scrap value of 14,000 Assume there is no time delay on the tax payments &

Machinery costing 120,000 has a 4 year life and a scrap value of 14,000

Assume there is no time delay on the tax payments & savings

The company can claim capital allowances at 25% on a reducing balance basis.

If the tax rate is 16%, what is the tax saving on the capital allowance in the SECOND year?

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