What is the marginal impact on taxes for a profitable corporation in the 35% marginal tax bracket that incurs an additional dollar of depreciation expense?

Question

Quizplus · Accepted Answer

When a corporation incurs additional depreciation expense, its taxable income reduces by that amount. Since the corporation is in the 35% marginal tax bracket, it will save 35 cents in taxes for every dollar of depreciation expense incurred. Therefore, the marginal impact on taxes will be a decrease of 35 cents.

What Is the Marginal Impact on Taxes for a Profitable