What would the CCA tax shields be for Years 0 and 4, assuming these tax shields start in Year 0 and end in Year 4? Remember: CCA = 30%.
A)$48,000 and $27,989
B)$52,000 and $0
C)$120,000 and $69,972
D)$48,000 and $69,972

Question

Quizplus · Accepted Answer

The CCA tax shield for Year 0 is calculated as 30% of the initial cost, which is $48,000. For Year 4, the tax shield is calculated based on the remaining undepreciated capital cost, resulting in $27,989.

What Would the CCA Tax Shields Be for Years 0