A project has sales of $600,000, costs of $366,500, depreciation of $34,500, interest expense of $5,500, and a tax rate of 21 percent.What is the value of the depreciation tax shield?

Name: A project has sales of $600,000, costs of $366,500, depreciation of $34,500, interest expense of $5,500, and a tax rate of 21 percent.What is the value of the depreciation tax shield?
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Question

Quizplus · Accepted Answer

The depreciation tax shield is calculated as the depreciation expense multiplied by the tax rate: $34,500 * 0.21 = $7,245.00.

A Project Has Sales of $600,000, Costs of $366,500, Depreciation