微信扫一扫
实时资讯全掌握
Earthworks Co invests $8million in new plant and machinery capital allowances are available and consist of a 40% first year allowance and 15% writing down allowances thereafter. The rate of corporation tax is 30% and the company's earnings before tax are $2.6million in year 1, increasing by 4% in each of the next four years. Calculate the impact on cumulative profits after tax if the first year allowance is suspended and a simple system of 20% writing down allowance is introduced. A. Earnings after tax are lower in years 1-4 and higher in year 5. B. Earnings after tax are lower in years 1-3 and higher in years 4-5. C. Earnings after tax are lower in years 1-2 and higher in years 3-5. D. Earnings after tax are lower in year 1 and higher in years 2-5. |