Use the information for the question(s)below.
Shepard Industries is evaluating a proposal to expand its current distribution facilities.Management has projected the project will produce the following cash flows for the first two years (in millions).

-The CCA tax shield for Shepard Industries project in year 2 is closest to:

Question

Use the information for the question(s)below.
Shepard Industries is evaluating a proposal to expand its current distribution facilities.Management has projected the project will produce the following cash flows for the first two years (in millions).
 
-The CCA tax shield for Shepard Industries project in year 2 is closest to:

Quizplus · Accepted Answer

The CCA tax shield is calculated as the CCA rate multiplied by the CCA balance. The CCA rate for Class 8 assets is 20%. The CCA balance in year 2 is $420. Therefore, the CCA tax shield in year 2 is $420 x 20% = $84.

Use the Information for the Question(s)below