Use the Following Information to Answer the Question(s)below

question 14

Multiple Choice

Use the following information to answer the question(s) below.
(Include the MACRS Table from the Appendix. )
Casa Grande Farms is considering purchasing multiple tractors for a total purchase price of $540,000.These tractors are expected to generate EBITDA of $250,000 for each of the next three years.Casa Grande Farms has a 21% tax rate and has a cost of capital of 10%.
-Assuming that Casa Grande Farms depreciates these tractors using MACRS depreciation method for three-year property starting immediately,then the annual depreciation tax shield in year 2 is closest to:

• A)$20,785.
• B)$16,795.
• C)$84,000.
• D)$180,000.

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Definitions:

Nasal Drops

A liquid medication administered through the nose to deliver drugs directly to the nasal mucosa.

Maxillary Sinus

One of the four sets of paranasal sinuses located in the maxillary bones beneath the eyes, involved in the process of humidifying and filtering inhaled air.

Supine Position

Lying on the back with the face up, a common position for various medical examinations and procedures.

Metered-Dose Inhaler

A device that delivers a specific amount of medication to the lungs in the form of a short burst of aerosolized medicine.