A New Machine Will Cost $1,800,000

A new machine will cost $1,800,000. It is in a CCA class pool that uses a declining balance rate of 30%. The company's tax rate is 38% and it requires a 9% rate of return on investments. Calculate the cash savings from the tax shield the first year assuming the savings occur at year end.

A) $153,577.98
B) $188,256.88
C) $167,400.00
D) $94,128.44
E) $102,600.00

Correct Answer:

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