Your Firm Needs a Computerized Machine Tool Lathe That Costs

question 114

Multiple Choice

Your firm needs a computerized machine tool lathe that costs $50,000, requires $10,000 in installation, and another $12,000 in maintenance for each year of its three-year life. After three years, this machine will be replaced. The machine falls into the MACRS three-year class life category. Assume a tax rate of 30 percent and a discount rate of 12 percent. Calculate the depreciation tax shield for this project in year 1.

• A)$7,199.20
• B)$8,886.00
• C)$5,999.40
• D)$6,554.40

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Definitions:

Dissatisfaction

The feeling of being unhappy or not pleased with a situation or outcome, often leading to a desire for change or improvement.

Temporary Effects

Short-term impacts or outcomes that are not expected to last over a long period.

Whig Party

A historical political party in the United States that existed from the 1830s to the 1850s, opposing the policies of President Andrew Jackson and the Democratic Party.

Civil War

A war between citizens of the same country, often arising from political, social, or economic disagreements or tensions.