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ABC is considering adding a new product line that is expected to increase annual sales by $418,000 and cash expenses by $337,000. The initial investment

ABC is considering adding a new product line that is expected to increase annual sales by $418,000 and cash expenses by $337,000. The initial investment will require $300,000 in fixed assets that will be depreciated using the MACRS 3-year property class over the four-year life of the project. The company has a marginal tax rate of 40 percent. What is the value of the depreciation tax shield in year 3?

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