Schroeder Electronics Is Considering a Project Which Will Require the Purchase

Multiple Choice

Schroeder Electronics is considering a project which will require the purchase of $5.68 million in new equipment that will be depreciated straight-line to a zero book value over the 5-year life of the project.Ignore bonus depreciation.The firm requires a rate of return of 12 percent and the tax rate is 21 percent.What is the value of the depreciation tax shield in Year 5 of the project?

A) $225,608
B) $228,406
C) $334,800
D) $238,560
E) $0