You Are Considering Adding a Microbrewery onto One of Your

question 43

Multiple Choice

You are considering adding a microbrewery onto one of your firm's existing restaurants. This will entail an investment of $47,000 in new equipment. This equipment will be depreciated straight-line over five years. If your firm's marginal corporate tax rate is 35%, then what is the value of the microbrewery's depreciation tax shield in the first year of operation?

• A) $3290
• B) $16,450
• C) $6110
• D) $30,550

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