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Your company is considering the purchase of a $30,000 car. It will be depreciated using the CCA system with a depreciation rate d = 30%.
Your company is considering the purchase of a $30,000 car. It will be depreciated using the CCA system with a depreciation rate d = 30%. The tax rate is 30% and the discount rate is 12%. What are the amounts of the tax savings from depreciation in years 1 (the year during which the car is purchased) and 2 of the project?
a. $1,350 and $1,890
b. $1,350 and $2,295
c. $2,700 and $1,890
d. $1,025.36 and $1,829.56
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