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For Years 1 Through 6 Better Products Ltd

Question 32

Multiple Choice

For Years 1 through 6 Better Products Ltd. had annual net income of $20,000, CCA of $40,000 each year, a 40 percent tax rate, a discount rate of 10 percent and annual cash sales of $200,000. The depreciable assets of Better Products belong in several different classes under the Income tax Act, have a salvage value of zero at the end of six years, and were all bought new at the beginning of Year 1. The present value factors, in simplified form, for 10 percent are:
For Years 1 through 6 Better Products Ltd. had annual net income of $20,000, CCA of $40,000 each year, a 40 percent tax rate, a discount rate of 10 percent and annual cash sales of $200,000. The depreciable assets of Better Products belong in several different classes under the Income tax Act, have a salvage value of zero at the end of six years, and were all bought new at the beginning of Year 1. The present value factors, in simplified form, for 10 percent are: -What is the tax saving from CCA in each year? A) $16,000 B) $24,000 C) $36,000 D) $54,000 E) $14,400
-What is the tax saving from CCA in each year?


A) $16,000
B) $24,000
C) $36,000
D) $54,000
E) $14,400

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