An investment tax credit (ITC) of $100 in comparison to CCA expense of $100 provides

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Quizplus · Accepted Answer

An ITC provides a larger tax shield benefit than CCA expense of the same amount. This is because an ITC provides a direct reduction in the tax liability, while CCA only provides a deduction against taxable income. Therefore, a $100 ITC would provide a $100 reduction in tax liability, while a $100 CCA expense would only provide a tax deduction that is equal to the expense multiplied by the company's tax rate.

An Investment Tax Credit (ITC) of $100 in Comparison to CCA