Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year7

MACRS Depreciation Rate 14.29% 24.49% 17.49% 12.49% 8.93% 8.92% 8.93% 4.46%

Massive Amusements, an owner of theme parks, invests $62million to build a roller coaster. This can be depreciated using the MACRS schedule shown above. How much less is the depreciation tax shield for year 4 under MACRS depreciation than under 7year, straight-line depreciation, if the tax rate is 20%?

A. $531,200

B. $3,320,000

C. $1,195,200

D. $644,000