A Machine Costs $3 Million and Has Zero Salvage Value

question 36

Multiple Choice

A machine costs $3 million and has zero salvage value.Assume a discount rate of 10% and a 40% tax rate.The machine is depreciated straight-line over 3 years for tax purpose.What is the present value of depreciation tax savings associated with this machine?

• A) $1,200,000
• B) $994,741
• C) $1,090,900
• D) $400,000

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Definitions:

Johari Window

A model used to improve understanding between individuals by mapping self-awareness and mutual understanding.

Blind Spot

An area in one's range of vision or understanding where visibility or comprehension is obstructed or lacks clarity.

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An individual's belief in their own ability to perform tasks effectively and successfully.

Feedback Self-efficacy

The belief in one’s capacity to accept and utilize feedback for improvement and learning.