You Are Considering Adding a Microbrewery on to One of Your

Multiple Choice

You are considering adding a microbrewery on to one of your firm's existing restaurants.This will entail an investment of $40,000 in new equipment.This equipment will be depreciated straight line over five years.If your firm's marginal corporate tax rate is 35%,then what is the value of the microbrewery's depreciation tax shield in the first year of operation?

A) $2800
B) $14,000
C) $5200
D) $26,000