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:

Intuitive

Refers to the ability to understand or know something without any direct evidence or reasoning process.

Sensing

A cognitive process that involves perceiving or taking in information through the senses.

Thinking

The process of using one's mind to consider or reason about something, involving cognition, problem-solving, and decision-making.

Feeling

A subjective, emotional state or reaction that something is experienced through the senses or emotions.