Value of the depreciation tax shield on their new project

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Reference no: EM131572881

The Sisyphean Company is considering a new project that will have an annual depreciation expense of $2.5 million. If Sisyphean's marginal corporate tax rate is 40% and their average corporate tax rate is 30%, then what is the value of the depreciation tax shield on their new project?

$750,000

$1,000,000

$1,500,000

$1,750,000

I do not know which tax to use to calculate the marginal or average tax.

Reference no: EM131572881

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