Question
A machine has an initial cost of $500,000 and useful life of 10 years. The tax rate is 40% and the discount rate is 12%.
A machine has an initial cost of $500,000 and useful life of 10 years. The tax rate is 40% and the discount rate is 12%. The annual depreciation tax shield is $20,000 in years 1 to 10. What is the present value of the annual depreciation tax shield?
Select one:
a. $67,802.68
b. $45,201.78
c. $113,004.46
d. None of THESE
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart
6th Edition
125991965X, 978-1259919657
