Suppose a machine that costs $80,000 has a useful life of ten years.Also suppose that capital cost allowance (CCA) deduction on the machine is $8,000 in year 4.The tax rate is 40%.What would be the tax savings from the CCA tax shield in year 4?
A) $4,800 outflow.
B) $3,200 outflow.
C) $3,200 inflow.
D) $4,800 inflow.
Correct Answer:
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