Assume a tax rate of 30 and a discount rate of 12 what is


Your firm needs a machine which costs $290,000, and requires $44,000 in maintenance for each year of its 5 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 30% and a discount rate of 12%. What is the depreciation tax shield for this project in year 5?

A) $38,976

B) $55,680

C) $6,681.60

D) $16,704.00

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Finance Basics: Assume a tax rate of 30 and a discount rate of 12 what is
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