A machine costs $3 million and has zero salvage value.Assume a discount rate of 10% and a 40% tax rate.The machine is depreciated straight-line over 3 years for tax purpose.What is the present value of depreciation tax savings associated with this machine?
A) $1,200,000
B) $994,741
C) $1,090,900
D) $400,000
Correct Answer:
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