If the depreciation is $20,000 and the marginal tax rate is 21 percent, calculate the annual depreciation tax shield.

Name: If the depreciation is $20,000 and the marginal tax rate is 21 percent, calculate the annual depreciation tax shield.
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Question

Quizplus · Accepted Answer

The annual depreciation tax shield is calculated as follows:

Depreciation Tax Shield = Depreciation x Marginal Tax Rate
= $20,000 x 0.21
= $4,200

Therefore, the correct answer is C.

If the Depreciation Is $20,000 and the Marginal Tax Rate