What Is the Amount of the Annual Depreciation Tax Shield

question 84

Multiple Choice

What is the amount of the annual depreciation tax shield for a firm with $200,000 in net income,$75,000 in depreciation expense,and a 35% marginal tax rate?

• A) $26,250
• B) $43,750
• C) $70,000
• D) $75,000

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Definitions:

Logix Controllers

Programmable logic controllers designed by Rockwell Automation, used in industrial automation and control systems.

Data Structure

A systematic approach for saving and arranging information in a computer to enable efficient retrieval and alteration.

User-Defined

Relating to a feature, function, or data that can be customized or specified according to the user's requirements or inputs, rather than being pre-set by software or hardware standards.

Consumed Tag

A label or identifier in a control system that represents data or a status used by one device and sourced from another.