Q-1:

You purchase a machine for $200,000 which belongs in a 30% CCA class. What is the present value of the CCA tax shield on the machine if it is sold at the end of the sixth year for $24,000, your tax rate is 34%, and the appropriate discount rate is 10%?

Select one:

a. $45,227

b. $40,143

c. $46,557

d. $66,623

e. $86,994