Question: Your firm needs a computerized machine tool lathe which costs $57,000 and requires $12,700 in maintenance for each year of its 3. year life. After

 Your firm needs a computerized machine tool lathe which costs $57,000
and requires $12,700 in maintenance for each year of its 3. year

Your firm needs a computerized machine tool lathe which costs $57,000 and requires $12,700 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, Assume a tax rate of 34 percent and a discount rate of 11 percent. Calculate the depreciation tax shield for this project in year 3. (Round your answer to 2 decimal places.) Your firm needs a computerized machine tool the which costs $57,000 and requires $12.700 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. Assume a tax rate of 34 percent and a discount rate of 11 percent. Calculate the depreciation tax shield for this project in your 3. (Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!