URGENT DUE LESS THAN AN HOUR

Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected the project will produce the following cash flows for the first two years (in millions).

Year	1	2
Revenues	1,150	1,500
Operating expense	375	550
Depreciation	250	260
Increase in working capital	40	90
Capital expenditures	250	300
Marginal corporate tax rate	30%	30%

The depreciation tax shield for Shepard Industries project in year 1 is closest to:

A.$90

B. $75

C. $113

D. $78