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

question 92

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 using MACRS depreciation method for three-year property starting immediately,then the annual depreciation tax shield in year 2 is closest to:

• A)20,785
• B)27,991
• C)84,000
• D)180,000

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Definitions:

Existential Import

A concept in logic and philosophy referring to the assumption within a categorical proposition that something exists.

Enthymeme

A rhetorical argument that omits a premise or conclusion, assuming it to be obvious to the audience.

Missing Premise

An implicit assumption or statement that is not explicitly stated but necessary for an argument to hold.

Enthymeme

An argument in which one premise is not explicitly stated, often used in persuasive speech and writing.