Question
Your firm needs a machine which costs $110,000, and requires $26,000 in maintenance for each year of its 5 year life. After 3 years, this
Your firm needs a machine which costs $110,000, and requires $26,000 in maintenance for each year of its 5 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 30% and a discount rate of 15%. What is the depreciation tax shield for this project in year 5?
A. $21,120
B. $3,168.00
C. $14,784
D. $6,336.00
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Finance Applications and Theory
Authors: Marcia Cornett, Troy Adair
3rd edition
1259252221, 007786168X, 9781259252228, 978-0077861681
