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What is the value of the depreciation tax shield

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Adex Mining is considering a project that will require the purchase of $379,000 of equipment. The equipment will be depreciated straight-line to a zero book value over the eight-year life of the project after which it will be worthless. The required return is 15 percent and the tax rate is 28 percent. What is the value of the depreciation tax shield in Year 3 of the project?

Reference no: EM132548326

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