For a Profitable Firm in the 30% Marginal Tax Bracket

Multiple Choice

For a profitable firm in the 30% marginal tax bracket with $100,000 of annual depreciation expense, the depreciation tax shield would be:

A) $10,500
B) $30,000
C) $35,000
D) $65,000 Depreciation tax shield = depreciation x tax rate = $100,000 x .30