The Corner Grill needs a new refrigeration unit which costs $28,000. The unit has a 4-year life after which time it will be worthless. The unit belongs in a 20 percent CCA class. The equipment can be leased for $8,300 a year. The firm can borrow money at 8.5 percent and has a 34 percent tax rate. What is the amount of the depreciation tax shield in year 3?

Answer rating: 100% (QA)

To calculate the depreciation tax shield in year 3 we need to determine the depreciation expense for ... View the full answer