What is the total nominal depreciation tax shield

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Problem 1: Of the total $150 million purchase price of a property, 30% is allocable to land and the rest to the buildings (also known as improvements). The depreciable life of this property is 40 years"B" wants to know what is the total nominal depreciation tax shield during a 5-year holding period? Assume that the tax rate is 30%. Show your calculations. Use either a calculator or Excel.

(a) $1.8 million

(b) $4.4 million

(c) $6.2 million

(d) $3.9 million

Reference no: EM132937490

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