An Asset with a Purchase Cost of $96 422 and a CCA

Multiple Choice

An asset with a purchase cost of $96 422 and a CCA rate of 40% has a market value of $4 000 at the end of its 10-year life. Assume this asset is the only asset in its class and the asset class is about to be closed out. The company's tax rate is 40% and its cost of capital is 6%. What is the Present Value of the tax shield lost due to the Undepreciated Capital Cost (UCC) in this case?

A) $509
B) $302
C) $403
D) $611