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A Firm Is Considering Investing in a New Machine That

Question 4

Multiple Choice

A firm is considering investing in a new machine that will cost $400,000 and will be depreciated straight-line over five years. If the firm's marginal tax rate is 39%, what is the annual depreciation tax shield of purchasing the machine?


A) $80,000
B) $31,200
C) $28,080
D) $156,000

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