Jain's Pharmaceuticals Is Installing New Lab Equipment at a Cost

Multiple Choice

Jain's Pharmaceuticals is installing new lab equipment at a cost of $5 million with an economic life of 5 years. Jain's marginal tax rate is 35%. What is the difference in tax expense in the second year if depreciation is computed using MACRS rates rather than straight line?

A) $350,000 more
B) $210,000 more
C) $350,000 less
D) $210,000 less