Question: Use the following information to answer the question(s) below. (Include the MACRS Table from the Appendix.) Casa Grande Farms is considering purchasing multiple tractors for

Use the following information to answer the question(s) below. (Include the

Use the following information to answer the question(s) below. (Include the MACRS Table from the Appendix.) Casa Grande Farms is considering purchasing multiple tractors for a total purchase price of $540,000. These tractors are expected to generate EBITDA of $250,000 for each of the next three years. Casa Grande Farms has a 21% tax rate and has a cost of capital of 10%. Assuming that Casa Grande Farms depreciates these tractors straight line over the three-year life, then the annual depreciation tax shield in year 2 is closest to: A. $80,000. B. $37,800. C. $84,000. OD. $117,000

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