What is the cca tax shield for year two, Financial Accounting

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What is the cca tax shield for year two

Problem

ABC company is considering the acquisition of machine which belongs to a class with CCA rate of 46%. The cost of the machine is $1,356,000. The expected economic life is 9 years. Salvage value is $216,000. The discount rate is 7.40% and the marginal tax rate is 30%. Assume the half-year rule applies. What is the CCA tax shield for year 2?

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Financial Accounting: What is the cca tax shield for year two

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