A project has sales of $511,800,costs of $322,400,depreciation of $22,620,interest expense of $3,062,and a tax rate of 34 percent.What is the value of the depreciation tax shield?

Name: A project has sales of $511,800,costs of $322,400,depreciation of $22,620,interest expense of $3,062,and a tax rate of 34 percent.What is the value of the depreciation tax shield?
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Quizplus · Accepted Answer

The depreciation tax shield is calculated as the depreciation expense multiplied by the tax rate: $22,620 * 0.34 = $7,690.80.

A Project Has Sales of $511,800,costs of $322,400,depreciation of $22,620,interest