Which of the following is true about capital cost allowance (CCA)? ____ Since CC

Question

Which of the following is true about capital cost allowance (CCA)?
____
Since CCA deduction is not a cash expense, it plays no role in capital budgeting
The CCA method uses a specific mandated CCA rate for each asset class
The CCA deduction is equal to the year-end UCC of the pool divided by the mandated CCA rate
The CCA method allows that the net capital cost of an asset is added to the pool in the year the asset is put in use.
Under the CCA method, higher CCA deductions occur in the early years. This reduces the early cash flows and thus lowers a project’s projected NPV

Explanation / Answer

Which of the following is true regarding externalities?

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