A firm invests $10 million in a new stamping machine.
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A firm invests $10 million in a new stamping machine.
A firm invests $10 million in a new stamping machine. It depreciates it straight line for tax purposes over 5 years. The tax rate is 30%, inflation is 4% a year, and the discount rate is 8%. What is the PV of the depreciation tax shield?
Multiple Choice
- $600,000.
- $2,395,626.
- $2,579,497.
- $3,000,000.
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A firm invests $10 million in a new stamping machine.
A firm invests $10 million in a new stamping machine.
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