Multiple Choice
What is the present value of the tax shield for the following project? The initial investment is $300,000.The project will last for 6 years, at which time the asset will be sold for $90,000.The asset will be depreciated on a declining balance basis at a rate of 20 percent.The firm's marginal tax rate is 40 percent.The firm's required rate of return is 8 percent.
A) 16,204.36
B) 66,335.32
C) 82,539.68
D) 98,744.04
Correct Answer:
Verified
Correct Answer:
Verified
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