Multiple Choice
A firm invests $10 million in a new stamping machine.It depreciates it straight line for tax purposes over 5 years.The tax rate is 30%,inflation is 4% a year,and the discount rate is 8%.What is the PV of the depreciation tax shield?
A) $600,000.
B) $2,395,626.
C) $2,579,497.
D) $3,000,000.
Correct Answer:
Verified
Correct Answer:
Verified
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