What is the depreciation tax shield for project

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Your firm needs a machine which costs $90,000, and requires $30,000 in maintenance for each year of its five-year life. After five years, this machine will be replaced. The machine falls into the MACRS five-year class life category. Assume a tax rate of 21 percent and a discount rate of 13 percent. What is the depreciation tax shield for this project in year 5?

Reference no: EM132494590

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