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Derek Chau

Chapter 3  CCA (capital cost allowance) is applied to UCC (undepreciated capital cost)  CCA is calculated at year end, and balance of the pool of assests  Half year rule, only half of newly acquired asset is subject to CCA  Half year rules comes into play only when net acquisitions figure for an asset class is positive  CCA reduces taxable income and tax payables  Selling price > cost = capital gain (taxable)  Capital loss – tax deductible loss generated on sale of non-depreciable assets (sale > cost)  CCA recapture (terminal loss) – tax on the amount by which the salvage value exceeds the UCC (positive, CCA recapture, if negative it is terminal loss)  CCA recapture = (lower of sell and original price – UCC Financial intermediaries have direct claims on borrowers There is no objective in corporate finance. It’s is something that is carried out in the corporation Agency costs are costs incurred due to core problems between shareholders and management Capital loss is a tax deductible loss on non-depreciable assets sold
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