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What is the depreciation tax shield for this project in year

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Question: Your firm needs a machine which costs $180,000, and requires $33,000 in maintenance for each year of its 7 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 7-year class life category. Assume a tax rate of 40% and a discount rate of 13%. What is the depreciation tax shield for this project in year 7?

Reference no: EM132480933

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