Shortcut calculation for tax savings on capital expenditure

Hi

Say,

Machinery = $400,000
Useful life = 4 years
Capital Allowance Rate = 25%
Corporation Tax Rate = 35%
Scrap Value = $5,000

Do you know any short cut that being used to calculate the total tax savings amount?

I only know till certain steps. ie 40,000 x 0.25 x 0.35 x 0.75 x 0.75 x....?

Will appreciate the help

Thanks

Quote:

---

Originally Posted by mingali

Machinery = $400,000
Useful life = 4 years
Capital Allowance Rate = 25%
Corporation Tax Rate = 35%
Scrap Value = $5,000

Do you know any short cut that being used to calculate the total tax savings amount?

I only know till certain steps. ie 40,000 x 0.25 x 0.35 x 0.75 x 0.75 x....?

---

Not sure what you're asking...
BUT seems evident that TOTAL savings (4 years)
will be 400000-5000 = 395000 * .35 = $138,250