A Canadian company buys a capital asset for $100 000. The asset depreciates at 20% per year, and the half-year rule applies. Use of the asset brings in $5 000 a year in profit. If these are the company's only cash flows, what is the first year in which they have to pay taxes?

Question

Quizplus · Accepted Answer

The Answer of A Canadian company buys a capital asset for $100 000. The asset depreciates at 20% per year, and the half-year rule applies. Use of the asset brings in $5 000 a year in profit. If these are the company's only cash flows, what is the first year in which they have to pay taxes?

A Canadian Company Buys a Capital Asset for $100 000