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Your Firm Needs a Machine Which Costs $90,000, and Requires

Question 104

Multiple Choice

Your firm needs a machine which costs $90,000, and requires $30,000 in maintenance for each year of its five-year life. After five years, this machine will be replaced. The machine falls into the MACRS five-year class life category. Assume a tax rate of 35 percent and a discount rate of 13 percent. What is the depreciation tax shield for this project in year 5?


A) $471.74
B) $1,347.84
C) $3,628.80
D) $6,739.20

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