The depreciation tax shield for Shepard Industries project in year 1 is closest to?

Name: The depreciation tax shield for Shepard Industries project in year 1 is closest to?
Brand: Quizplus
Rating: 4.7 (52 reviews)

Question

Quizplus · Accepted Answer

Depreciation tax shield = Depreciation expense x Tax rate
Given, 
Depreciation expense = ($600,000 - $0) / 3 = $200,000
Tax rate = 36% (assuming a corporate tax rate of 36%)

Substituting the values in the above formula, we get:
Depreciation tax shield = $200,000 x 36% = $72,000 ≈ $72
Therefore, the closest answer is option C.

The Depreciation Tax Shield for Shepard Industries Project in Year