What is the depreciation tax shield for the project

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Question: Your firm needs a machine which costs $180,000, and requires $39,000 in maintenance for each year of its 5 year life. After 5 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 35% and a discount rate of 16%. What is the depreciation tax shield for this project in year 5?

Reference no: EM131975391

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