Your Firm Needs a Machine Which Costs $50,000, and Requires

Your firm needs a machine which costs $50,000, and requires $2,000 in maintenance for each year of its three-year life. After three years, this machine will be replaced. The machine falls into the MACRS three-year class life category. Assume a tax rate of 35 percent and a discount rate of 10 percent. What is the depreciation tax shield for this project in year 3?

A) $2,591.75
B) $3,291.75
C) $4,813.25
D) $5,833.33

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free