You Are Considering Adding a Microbrewery on to One of Your

question 26

Multiple Choice

You are considering adding a microbrewery on to one of your firm's existing restaurants.This will entail an investment of $40,000 in new equipment.This equipment will be depreciated straight line over five years.If your firm's marginal corporate tax rate is 35%,then what is the value of the microbrewery's depreciation tax shield in the first year of operation?

• A)$2800
• B)$14,000
• C)$5200
• D)$26,000

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Definitions:

Brain

The organ located within the skull that is the center of the nervous system in all vertebrates and most invertebrates, responsible for coordinating sensation, intellectual and nervous activity.

Pituitary Gland

A pea-sized gland located at the base of the brain that produces hormones regulating growth, blood pressure, and other important body functions.

Endocrine System

A network of glands in the body that secretes hormones directly into the bloodstream to regulate bodily functions.

Master Gland

A term often used to describe the pituitary gland due to its central role in regulating numerous other endocrine glands in the body.