Question: Suppose a machine that costs $80,000 has a useful life of 10 years. Also suppose that depreciation on the machine is $8,000 for tax purposes in year 4. The tax rate is 40%. The tax savings from the depreciation tax shield in year 4 would be:
A) $4,800 inflow. C) $4,800 outflow.
B) $3,200 inflow. D) $3,200 outflow.