Question: Schroeder Electronics is considering a project which will require the purchase of $5.68 million in new equipment that will be depreciated straight-line to a zero

Schroeder Electronics is considering a project which will require the purchase of $5.68 million in new equipment that will be depreciated straight-line to a zero book value over the 5-year life of the project. Ignore bonus depreciation. The firm requires a rate of return of 12 percent and the tax rate is 21 percent. What is the value of the depreciation tax shield in Year 5 of the project?

A. $225,608

B. $228,406

C. $334,800

D. $238,560

E. $0

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