The Sisyphean Company is considering a new project that will have an annual depreciation expense of $3.6 million. If Sisyphean's marginal corporate tax rate is 35% and its average corporate tax rate is 30%, then what is the value of the depreciation tax shield on the company's new project?
A) $1,080,000
B) $1,260,000
C) $1,890,000
D) $1,134,000

Question

Quizplus · Accepted Answer

B) Here we need to use the marginal tax rate. 11ea84dc_f546_ca22_9a63_bd7b68f6977f_TB1316_00_TB1316_00

The Sisyphean Company Is Considering a New Project That Will