A Machine Costs $3 Million and Has Zero Salvage Value

question 63

Multiple Choice

A machine costs $3 million and has zero salvage value.The machine qualifies under the 3-year MARCS category.Assume a discount rate of 10% and a 40% tax rate.What is the present value of depreciation tax savings associated with this machine? (MARCS tax depreciation schedule of a 3-year class asset: 33.33% in year 1,44.45% in year 2,14.81% in year 3,and 7.41% in year 4)

• A) $1,090,900
• B) $1,200,000
• C) $994,741
• D) $998,684

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Definitions:

Gas Exchange

The process by which oxygen is taken in and carbon dioxide is released by the body, often occurring in the lungs.

Anaerobic Threshold

The point during intense exercise at which the body starts to produce energy through anaerobic metabolism, leading to the rapid accumulation of lactic acid in the muscles.

Aerobic Threshold

The intensity of exercise at which the body switches from anaerobic to aerobic metabolism, indicating improved endurance.

Blood Ph

The measure of the acidity or alkalinity of the blood, with a normal range typically between 7.35 and 7.45.