Final answer:
The CCA system specifies the declining balance rate for depreciation of assets for tax purposes, which is faster in earlier years and decreases over time.
Step-by-step explanation:
The CCA system, or Capital Cost Allowance, specifies the declining balance rate a firm can use to depreciate its assets for tax purposes; this is known as the CCA rate. Unlike the straight-line method of depreciation, which expenses the cost of an asset evenly over its useful life, the declining balance method expedites depreciation in the earlier years, with the amount of depreciation decreasing each year based on a constant percentage applied to a decreasing book value.
The CCA system is a common method in Canada that allows businesses to write off the cost of capital assets at a prescribed rate each year. The specific CCA rate varies depending on the type of asset but is designed to approximate the useful life and value of assets as they age and are used in business operations.
Answer: c. Declining balance