For a profitable firm in the 30% marginal tax bracket with $100,000 of annual depreciation expense,the depreciation tax shield would be:
A) $10,500
B) $30,000
C) $35,000
D) $65,000

Name: For a profitable firm in the 30% marginal tax bracket with $100,000 of annual depreciation expense,the depreciation tax shield would be: A) $10,500 B) $30,000 C) $35,000 D) $65,000
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Quizplus · Accepted Answer

The depreciation tax shield is calculated by multiplying the depreciation expense by the tax rate. Here, $100,000 * 30% = $30,000.

For a Profitable Firm in the 30% Marginal Tax Bracket