Information About a Project Wunderbar Company Is Considering Is as Follows

Multiple Choice

Information about a project Wunderbar Company is considering is as follows: $$\begin{array} { l r } \text { Investment } & \$ 600,000 \\\text { Revenues } & \$ 380,000 \\\text { Variable costs } & \$ 100,000 \\\text { Fixed out-of-pocket costs } & \$ 50,000 \\\text { Cost of capital } & 8 \% \\\text { Tax rate } & 40 \%\end{array}$$ The property is considered 5-year property for tax purposes. The company plans to use MACRS and dispose of the property at the end of the sixth year; no salvage value is expected. Assume all cash flows occur at the end of the year. Round amounts to dollars.
The tax savings from depreciation in Year 2 would be

A) $48,000.
B) $64,800.
C) $82,400.
D) $76,800.