The machine falls into the macrs 5-year class life category


Your firm needs a machine which costs $230,000, and requires $38,000 in maintenance for each year of its 5 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 30% and a discount rate of 13%. What is the depreciation tax shield for this project in year 5?

$30,912
$44,160
$5,740.80
$ 13,248.00

 

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Finance Basics: The machine falls into the macrs 5-year class life category
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