Massive Amusements, an Owner of Theme Parks, Invests $65 Million

question 74

Multiple Choice

Massive Amusements, an owner of theme parks, invests $65 million to build a roller coaster. This can be depreciated using the MACRS schedule shown above. How much less is the depreciation tax shield for year 4 under MACRS depreciation than under 7-year, straight-line depreciation, if the tax rate is 35%?

• A) $974,680
• B) $1,218,350
• C) $2,193,030
• D) $6,091,750

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