A Firm Is Considering Investing in a New Machine That $$07,692
D)$234,000

question 31

Multiple Choice

A firm is considering investing in a new machine that will cost $600,000 and will be depreciated straight-line over five years.If the firm's marginal tax rate is 39%,what is the annual depreciation tax shield of purchasing the machine?

• A)$120,000
• B)$46,800
• C)$$07,692
• D)$234,000

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Definitions:

Geographical Adjustments

Adjustments made to policies, prices, or strategies based on the geographical location of markets or resources.

Discounts

are reductions from the usual cost of something, often used to prompt sales or as a negotiation tactic.

Allowances

Discounts or financial concessions given to customers, employees, or distributors as an incentive or for defective goods.

Cumulative Quantity Discounts

Price reductions applied to purchases based on the accumulated quantity bought over a specific time period, incentivizing larger orders.