Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected that...

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Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected that the project will produce the following cash flows for the first two years (in millions of dollars). Year 2 Revenues 1200 1375 Operating expense 425 575 Depreciation 210 300 Increase in working capital 50 80 Capital expenditures 280 330 Marginal corporate tax rate 20% 20% The depreciation tax shield for Shepard Industries project in year 2 is closest to OA. $90 million OB. $72 million C. $60 million OD. $42 million Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected that the project will produce the following cash flows for the first two years (in millions of dollars). Year 2 Revenues 1200 1375 Operating expense 425 575 Depreciation 210 300 Increase in working capital 50 80 Capital expenditures 280 330 Marginal corporate tax rate 20% 20% The depreciation tax shield for Shepard Industries project in year 2 is closest to OA. $90 million OB. $72 million C. $60 million OD. $42 million