Question: Your firm needs a computerized machine tool lathe which costs $45,000 and requires $11,500 in maintenance for each year of its 3-year life. After three

Your firm needs a computerized machine tool lathe which costs $45,000 and requires $11,500 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category, and neither bonus depreciation nor Section 179 expensing can be used. Assume a tax rate of 21 percent and a discount rate of 12 percent Calculate the depreciation tax shield for this project in year 3. (Round your answer to 2 decimal places.) Depreciation tax shield Year S'LE 3 33 339 44 45 1481 7.41 0.00 0.00 000 0.00 4 5 6 2 20 3.750% 7219 6677 6.177 5713 5285 15 500% 9.50 8.55 770 693 62 5.90 530 591 590 591 590 591 Residential 275 3.485% 3636 3636 3636 3635 1636 3.636 3636 3636 3632 3636 3637 3616 HOST Estate Nonresidential 39 3042% 24614 3.175 2564 3175 2564 3.175 2564 3175 2564 175 2564 2564 33.175 2564 3 174 2564 3175 2564 1174 3175 2664 3.174 2564 3175 2564 8 Normal Recovery Period 5 7 10 20.00% 14.29% 1000% 32.00 2449 1800 19 20 17.49 14 40 11 52 12.49 1152 11 52 892 9.22 576 892 737 000 893 655 000 4 46 655 000 6.56 0.00 655 3.28 000 000 000 0.00 000 000 000 000 0.00 000 000 000 000 0.00 0.00 000 000 000 0.00 000 9 10 11 12 1 000 000 000 000 000 000 1922 000 000 000 000 000 000 000 4522 4462 4461 4462 4461 4462 4461 4 462 4461 46 4461 065 PI 51 LEDE 000 1957 16 0.00 0.00 0.00 0.00 0.00 000 000 56 591 2.95 000 0.00 0.00 000 3.174 3175 000 000 7.564 25 2.564 264 25 2904 28 000 0.00 000 000 4461 13 10 20 21 22 23 24 PILE SZI 26 000 000 000 000 000 000 0.00 0.00 000 000 000 0.00 000 0.00 0.00 000 000 22.036 3637 1636 3097 361 1637 3030 632 361 702 366 36 360 1970 0.00 000 000 000 000 000 1174 3175 3.14 3175 000 0.00 0.00 0.00 000 79516 000 PIE 000 000 0010 20 22 000 0.00 0.00 0.00 0.00 3564 2564 000 0.00 000 000 110 000 0.00 000 000 132 POSTE 3.12 3124 3175 3474 29 000 0.00 0.00 0.00 0.00 000 000 000 0.00 0.00 000 0.00 0.00 SU 9 0.00 000 000 000 000 000 32 000 0.00 000 000 000 000 000 3174 720 0.00 2564 2504 2554 2056 2564 26 3. EF 000 000 34 000 000 000 000 000 000 0.00 0.00 000 000 000 000 000 000 000 SE 000 ODID 000 0.00 0.00 000 0.00 000 1950 000 000 0:00 000 000 32 000 000 000 0.00 000 100 000 000 0.00 0:00 000 0.00 0.00 000 0.00 000 000 0.00 000 9.00 0.00 000 000 0.00 0.00 000 000 0.00 0.00 25 2564 2:56 0.10 0000 OP 000 000 000 000 000 000 000 0:00 0.00

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