1.In the Canadian tax system, the sale of an asset in a particularasset class can simultaneously trigger a depreciation recapture and a loss on disposal.A) TB) F2.For given demand and supply schedules, the market equilibrium is always in a price interval in which demand is elastic because the total consumer expenditure in this price range decreases.A) TB) F3.When using the equivalent annual value criterion to compare equipment alternatives, it is assumed that continuous replace-ments are made for as long as the service of such equipment is required.A) TB) F
4.A capital gain occurs when a depreciable asset is sold for more than its undepreciated balance at the time of sale, but forless than its purchase price.A) TB) F5.In the Canadian tax system, assets belonging to the same class depreciated by the declining-balance methodare grouped into pools and depreciated together.A) TB) F6. The discounted payback periodis superior to the payback period because it considers the cash flows that occur beyond thediscounted capital recovery period.
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