Multiple Choice
Your firm needs a computerized machine tool lathe which costs $50,000, requires $10,000 in installation, $5,000 in freight charges and another $12,000 in maintenance for each year of its 3-year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 30% and a discount rate of 12%. Calculate the depreciation tax shield for this project in year 1.
A) $6,499.35
B) $6,886.00
C) $5,999.40
D) $5,554.40
Correct Answer:
Verified
Correct Answer:
Verified
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