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Suppose your company is considering buying a van costing $100,000, including any set-up costs that must be capitalized. The CCA rate for the asset class
Suppose your company is considering buying a van costing $100,000, including any set-up costs that must be capitalized. The CCA rate for the asset class is 20%. Corporate tax rate is 40%. Develop a CCA, CCA tax shields, and UCC schedule for the first 10 years. Suppose the company decides to sell the van after three years for $30,000 and terminates the asset pool. Calculate the tax results. What if the sales price is $60,000? Provide an explanation for the tax results
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