What Is the Present Value of the Tax Shield for the Following

question 108

Multiple Choice

What is the present value of the tax shield for the following project? The initial investment is $300,000.The project will last for 6 years, at which time the asset will be sold for $90,000.The asset will be depreciated on a declining balance basis at a rate of 20 percent.The firm's marginal tax rate is 40 percent.The firm's required rate of return is 8 percent.

• A)16,204.36
• B)66,335.32
• C)82,539.68
• D)98,744.04

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