Use the Information for the Question(s)below

Multiple Choice

Use the information for the question(s) below.
Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects:

-A firm is considering investing in a new machine that will cost $600 000 and will be depreciated using the straight-line method over five years. If the firm's marginal tax rate is 30%, what is the annual depreciation tax shield of purchasing the machine?

A) $36 000
B) $120 000
C) $234 000
D) $107 692