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Bagley Inc. is considering purchasing a piece of farm equipment worth $280,000. The equipment would be depreciated on a straight-line basis assuming no residual value
Bagley Inc. is considering purchasing a piece of farm equipment worth $280,000. The equipment would be depreciated on a straight-line basis assuming no residual value over the course of 7 years, after which time it would be scrapped.
Assuming that the tax rate is 25%, and the discount rate is 6%, what would be the amount of the annual depreciation tax shield of the proposed equipment?
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