What Is the Annual Depreciation Tax Shield for a Profitable

question 99

Multiple Choice

What is the annual depreciation tax shield for a profitable firm in the 30% marginal tax bracket with $100,000 of annual depreciation expense?

• A) $10,500
• B) $30,000
• C) $35,000
• D) $65,000

---

Definitions:

Physical Controls

Security measures that are implemented to protect assets, including locks, surveillance cameras, and alarm systems.

Safeguard Assets

Measures or strategies implemented by a company to protect its assets from theft, damage, or misuse.

Automated System

A setup or process where tasks are performed with minimal human intervention, often through the use of technology or machinery.

Internal Control

A process designed to provide reasonable assurance regarding the achievement of objectives in effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.