Droids-R-Us Inc A)$110,033
B)$188,573
C)$134,673
D)$314,380
E)$538,780

Droids-R-Us Inc. (DRU) , is considering the installation of a new production line to make service mechanoids. The cost of the new manufacturing equipment is $2.2 million. The machines are classified as 7-year properties. (MACRS rates are provided in the table, below.) The machines will be purchased at the beginning of 2014. (DRU uses a mid-year placed-in-service convention.) DRU's engineers estimate that the new assembly line could be ready for operations in early 2014. Annual EBITDA is forecasted to be $1.3M for 2014 and all subsequent years of the project. DRU's marginal tax rate is 35%. What is the value of the depreciation tax shield in 2015? (Do NOT assume that the equipment is salvaged in 2015.) Round your answers to the nearest dollar. $$\begin{array} { | c | c | c | c | } \hline \text { Year } & \text { 5-Year } & \text { 7-Year } & \text { 10-Year } \\\hline 1 & 20.00 \% & 14.29 \% & 10.00 \% \\\hline 2 & 32.00 \% & 24.49 \% & 18.00 \% \\\hline 3 & 19.20 \% & 17.49 \% & 14.40 \% \\\hline 4 & 11.52 \% & 12.49 \% & 11.52 \% \\\hline 5 & 11.52 \% & 8.93 \% & 9.22 \% \\\hline\end{array}$$

A) $110,033
B) $188,573
C) $134,673
D) $314,380
E) $538,780