Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected that the project will produce the following cash flows for the first two years (in millions of dollars).

The depreciation tax shield for Shepard Industries project in year 2 is closest to ________.
A) $90 million
B) $69 million
C) $135 million
D) $108 million

Question

Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected that the project will produce the following cash flows for the first two years (in millions of dollars) .

The depreciation tax shield for Shepard Industries project in year 2 is closest to ________.

The depreciation tax shield for Shepard Industries project in year 2 is closest to ________.
A) $90 million 
B) $69 million 
C) $135 million 
D) $108 million

Quizplus · Accepted Answer

A) $300 × 0.30 = $90 million

Shepard Industries Is Evaluating a Proposal to Expand Its Current