Your firm needs a machine which costs $280,000, and requires $49,000 in maintenance for each year of its 7 year life. After 5 years, this machine will be replaced. The machine falls into the MACRS 7-year class life category. Assume a tax rate of 30% and a discount rate of 16%. What is the depreciation tax shield for this project in year 7?

$17,502.80

$25,004

$7,501.20

$4,000.64