Souza Corporation is considering an investment in equipment for $75,000 with a four-year life and no salvage value. Souza uses the straight-line method of depreciation and is subject to a 35 percent tax rate.
Over the life of the project, the total tax shield created by depreciation is:
A) $12,500
B) $26,250
C) $25,000
D) $75,000
Correct Answer:
Verified
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