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Q1 - CCA (30 minutes) You purchase a piece of equipment for $440K at...
question 20 Albernie LTD purchase a CCA class 8 (CCA rate of 20%) item of equipment...
question 20 Albernie LTD purchase a CCA class 8 (CCA rate of 20%) item of equipment for $90000 the equipment was the only item in the class 8 capital cost allowance pool the equipment is expected to generate savings in the amount of $40000 per year the company uses straight line depreciation estimates a 3 year useful life with $20000 salvage value for the new equipment the tax rate is 35% and albernie has a required rate of return of...
You purchase a machine for $200,000 which belongs in a 30% CCA class. What is the...
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 fifth year for $24,000, your tax rate is 35%, and the appropriate discount rate is 10%? Select one: a. $52,215 b. $46,202 c. $86,994 d. $66,623 e. $40,143
Q2. (25 marks) Calculate depreciation and CCA On July 2, 2019, Vicuna Inc. purchased equipment for...
Q2. (25 marks) Calculate depreciation and CCA On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Vicuna has a December year end. Instructions a) Complete the schedule below by determining the depreciation expense/CCA and year-end...
Southport Company is considering the purchase of a piece of equipment that costs $100,000. The equipment...
Southport Company is considering the purchase of a piece of equipment that costs $100,000. The equipment would be depreciated on a straight-line basis to its expected salvage value of $10,000 over its 10-year useful life. Assuming a tax rate of 40%, what is the annual amount of the depreciation tax shield provided by this investment? Multiple Choice $4,000 $9,000 $3,600 None of these answers is correct.
Question 1 A business equipment used for the manufacture of commercial goods $40,000. This asset is expected to be sold...
Question 1 A business equipment used for the manufacture of commercial goods $40,000. This asset is expected to be sold after 4 years for $7,000. Compute the depreciation amounts every year (depreciation schedule) during the useful life of this asset. Please refer to a current tax regulations1 for CCA rates. Please attempt using the following methods: can be purchased for First, book depreciation: [a] Straight-line (SL) method (Book Depreciation) b] Double balance (DB) method with rate 20% (Book Depreciation) [c]...
Gomi Waste Disposal is evaluating a project that would require the purchase of a piece of equipment for 115,000 dollars...
Gomi Waste Disposal is evaluating a project that would require the purchase of a piece of equipment for 115,000 dollars today. During year 1, the project is expected to have relevant revenue of 116,000 dollars, relevant costs of 32,000 dollars, and relevant depreciation of 28,000 dollars. Gomi Waste Disposal would need to borrow 115,000 dollars today to pay for the equipment and would need to make an interest payment of 3,000 dollars to the bank in 1 year. Relevant net...
Company A is considering the purchase of a new piece of equipment which would cost $10,000...
Company A is considering the purchase of a new piece of equipment which would cost $10,000 with a 5 year useful life and have a salvage of $500 at the end of the 5 year period. Marginal tax rate is 30%, avg tax rate 20%. Assume straight line depreciation, the net effect of annual depreciation on the free cash flow is$___ in each of the 5 years.
Tank Ltd is considering undertaking the purchase of a new piece of equipment that is expected...
Tank Ltd is considering undertaking the purchase of a new piece of equipment that is expected to increase revenue by $12,000 each year for six years. The equipment will increase costs $4,000 each year for six years. It costs $32,000 to purchase today and for tax purposes must be depreciated down to zero over its 8 year useful life using the straight-line method. If Tank is actually forecasting a salvage (for capital budgeting purposes) of $5,000 after 6 years, what...
Our new computer system cost us $100,000. We will outgrow it in five years. When we...
Our new computer system cost us $100,000. We will outgrow it in five years. When we sell it, we will probably get only 20% of the purchase price. CCA on the computer will be calculated at a 30% rate (Class 10). Calculate the CCA and UCC values for five years. (Round the final answers to 2 decimal places. Omit $ sign in your response.) Year CCA Ending UCC 1 $ $ 2 $ $ 3 $ $ 4 $ $...
Current Attempt in Progress On December 31, 2019, Monty Inc. has taxable temporary differences of $2.19 million and a deferred tax liability of $613,200. These temporary differences are due to Monty having claimed CCA in excess of book depreciation in pri
Current Attempt in ProgressOn December 31, 2019, Monty Inc. has taxable temporary differences of $2.19 million and a deferred tax liability of $613,200. These temporary differences are due to Monty having claimed CCA in excess of book depreciation in prior years. Monty’s year end is December 31. At the end of December 2020, Monty’s substantively enacted tax rate for 2020 and future years was changed to 30%.For the year ended December 31, 2020, Monty’s accounting loss before tax was $493,500. The following data are also available.1.Pension expense was...
Q2. (25 marks) Calculate depreciation and CCA On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Vicuna has a December year end. Instructions a) Complete the schedule below by determining the depreciation expense/CCA and year-end...
Question 1 A business equipment used for the manufacture of commercial goods $40,000. This asset is expected to be sold after 4 years for $7,000. Compute the depreciation amounts every year (depreciation schedule) during the useful life of this asset. Please refer to a current tax regulations1 for CCA rates. Please attempt using the following methods: can be purchased for First, book depreciation: [a] Straight-line (SL) method (Book Depreciation) b] Double balance (DB) method with rate 20% (Book Depreciation) [c]...
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