Use the Table for the Question(s)below

question 23

Multiple Choice

Use the table for the question(s) below.
-You are considering adding a microbrewery onto one of your firm's existing restaurants. This will entail an investment of $40 000 in new equipment. This equipment will be depreciated using the straight-line method over five years. If your firm's marginal corporate tax rate is 30%, then what is the value of the microbrewery's depreciation tax shield in the first year of operation?

• A)$26 000
• B)$2 400
• C)$14 000
• D)$5 200

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Definitions:

Alcohol-based Rub

A disinfectant preparation for hands that contains alcohol, used to prevent infection by killing bacteria and viruses.

Medical Asepsis

Practices aimed at reducing the number and transmission of pathogens to prevent infections, often through sterilization and disinfection methods.

Skin Protectant

A substance applied to the skin to prevent irritation, damage from external factors, or to aid in healing, offering a barrier of protection.

Petroleum-based Product

A product derived from refining crude oil, such as gasoline, plastics, or synthetic fabrics.