The Local Printing Company Purchases a New Copy Machine for $150,000

question 41

Multiple Choice

The local printing company purchases a new copy machine for $150,000 that reduces the cost of making a color copy by ten cents a copy.The copy machine can be depreciated straight line for seven years and the company is in the 28 percent income tax bracket.The owner believes he can sell the machine for $10,000 at the end of seven years.Approximately how much will this company save on an annual basis in income taxes?

• A)$42,000
• B)$39,200
• C)$2,800
• D)$5,600