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

question 52

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 35% tax rate and has a cost of capital of 10%.
-Assuming that Casa Grande Farms depreciates these tractors straight line over the three year life,then the annual depreciation tax shield in year 2 is closest to:

• A)63,000
• B)80,000
• C)84,000
• D)117,000

---

Definitions:

Weekly Total

The aggregate or sum total of something accumulated or recorded in a week.

Emotional Factors

Psychological influences that affect an individual's feelings, mood, and behavior.

Skeletal Abnormalities

Deviations or anomalies in the structure or function of the bones, affecting shape, strength, or integrity.

Activity Tolerance

The level of physical activity that a person can perform without experiencing adverse effects.