What is the amount of the annual depreciation tax shield for a firm with $200,000 in net income,$75,000 in depreciation expense,and a 35% marginal tax rate?
A) $26,250
B) $43,750
C) $70,000
D) $75,000

Name: What is the amount of the annual depreciation tax shield for a firm with $200,000 in net income,$75,000 in depreciation expense,and a 35% marginal tax rate? A) $26,250 B) $43,750 C) $70,000 D) $75,000
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Question

Quizplus · Accepted Answer

Depreciation tax shield = $75,000 × 0.35 = $26,250

What Is the Amount of the Annual Depreciation Tax Shield