The managers of Poncho Parts, Inc plan to manufacture engine blocks for classic cars from the 1960s era They expect to sell 250 blocks annually for the next 5 years The necessary foundry and machining equipment will cost a total of $800,000 This amount will be depreciated on a straight line basis to zero over the project's life The firm expects to be able to dispose of the manufacturing equipment for $150,000 at the end of the project Labor and materials costs total $500 per engine block, fixed costs are $125,000 per year Assume a 35 tax rate and a 12 discount rate What is the annual depreciation tax shield for this project a $20,000 b $56,000 c $100,000 d $104,000 e $120,000

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The managers of Poncho Parts, Inc  plan to manufacture engine blocks for classic cars from the 1960s era  They expect to sell 250 blocks annually for the next 5 years  The necessary foundry and machining equipment will cost a total of $800,000  This amount will be depreciated on a straight line basis to zero over the project's life  The firm expects to be able to dispose of the manufacturing equipment for $150,000 at the end of the project  Labor and materials costs total $500 per engine block, fixed costs are $125,000 per year  Assume a 35  tax rate and a 12  discount rate  What is the annual depreciation tax shield for this project  a  $20,000 b  $56,000 c  $100,000 d  $104,000 e  $120,000

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The managers of Poncho Parts, Inc. plan to manufacture engine blocks for classic cars from the 1960s era. They expect to sell 250 blocks annually

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