Massive Amusements, an owner of theme parks, invests $65 million to build a roller coaster. This can be depreciated using the MACRS schedule shown above. How much less is the depreciation tax shield for year 4 under MACRS depreciation than under 7-year, straight-line depreciation, if the tax rate is 35%?
A) $974,680
B) $1,218,350
C) $2,193,030
D) $6,091,750

Question

Massive Amusements, an owner of theme parks, invests $65 million to build a roller coaster. This can be depreciated using the MACRS schedule shown above. How much less is the depreciation tax shield for year 4 under MACRS depreciation than under 7-year, straight-line depreciation, if the tax rate is 35%?
A) $974,680 
B) $1,218,350 
C) $2,193,030 
D) $6,091,750

Quizplus · Accepted Answer

B) 11eaabab_c098_5f16_b90e_ed5dc188da7b_TB5536_00 11eaabab_c098_8627_b90e_47e427df9d72_TB5536_00 11eaabab_c098_8628_b90e_4332a8c83240_TB5536_00 11eaabab_c098_8629_b90e_fdf0b5d131ea_TB5536_00

Massive Amusements, an Owner of Theme Parks, Invests $65 Million