An Asset with a Purchase Cost of $112 500 and a CCA

Multiple Choice

An asset with a purchase cost of $112 500 and a CCA rate of 20% has a market value of $7 500 at theend of its 12-year life. Assume this asset is the only asset in its class and the asset class is about tobe closed out. The company's tax rate is 30% and its cost of capital is 12%. What is the Present Value of the tax shield lost due to the Undepreciated Capital Cost (UCC) in this case?

A) -$245
B) -$401
C) -$311
D) -$104