If the depreciation is $20,000 and the marginal tax rate is 35 percent, calculate the annual depreciation tax shield.

Name: If the depreciation is $20,000 and the marginal tax rate is 35 percent, calculate the annual depreciation tax shield.
Brand: Quizplus
Rating: 4.9 (63 reviews)

Question

Quizplus · Accepted Answer

To calculate the annual depreciation tax shield, we need to multiply the depreciation amount by the marginal tax rate. 
Annual depreciation tax shield = Depreciation x Marginal tax rate
= $20,000 x 35% = $7,000
Therefore, the correct answer is option C.

If the Depreciation Is $20,000 and the Marginal Tax Rate