What is the depreciation tax shield for this project

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Reference no: EM13282930

Your firm needs a machine which costs $500,000, and requires $10,000 in maintenance for each year of its 3 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35% and a discount rate of 15%. What is the depreciation tax shield for this project in year 3?

Reference no: EM13282930

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