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The Sirius Ltd. purchased a piece of equipment at the very beginning of a fiscal year of 1999. The UCC amounts for this equipment are as follows: Adjustments to UCC from purchases Base UCC and amounts Remaining Year dispositions for CCA 1999 $40,000 2000 0 CCA UCC $20,000 $36,000 $4,000 $7,200 $36,000 $28,800 What is the present worth of the company's savings due to the CCA over the two-year period if the corporate tax rate is 25% and the MARR rate is 10%?

The Sirius Ltd. purchased a piece of equipment at the very beginning of a fiscal year of 1999. The UCC amounts for this equipment are as follows: Adjustments to UCC from purchases Base UCC and amounts Remaining Year dispositions for CCA 1999 $40,000 2000 0 CCA UCC $20,000 $36,000 $4,000 $7,200 $36,000 $28,800 What is the present worth of the company's savings due to the CCA over the two-year period if the corporate tax rate is 25% and the MARR rate is 10%?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Sirius Ltd. purchased a piece of equipment at the very beginning of a fiscal year of 1999. The UCC amounts for this equipment are as follows: Adjustments to UCC from purchases and Base UCC amounts Year dispositions for CCA 1999 $40,000 2000 0 Remaining CCA UCC $20,000 $4,000 $36,000 $36,000 $7,200 $28,800 What is the present worth of the company's savings due to the CCA over the two-year period if the corporate tax rate is 25% and the MARR rate is 10%? $3,214 $4,263 $2,488 $2,800 $2.397
Transcribed Image Text:The Sirius Ltd. purchased a piece of equipment at the very beginning of a fiscal year of 1999. The UCC amounts for this equipment are as follows: Adjustments to UCC from purchases and Base UCC amounts Year dispositions for CCA 1999 $40,000 2000 0 Remaining CCA UCC $20,000 $4,000 $36,000 $36,000 $7,200 $28,800 What is the present worth of the company's savings due to the CCA over the two-year period if the corporate tax rate is 25% and the MARR rate is 10%? $3,214 $4,263 $2,488 $2,800 $2.397
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