If the depreciation amount is 600,000 and the marginal tax rate is 35%, then the tax shield due to depreciation is:
A) $210,000
B) $600,000
C) $390,000
D) None of the above

Question

Quizplus · Accepted Answer

The tax shield due to depreciation is equal to the depreciation amount multiplied by the marginal tax rate. Therefore, the tax shield in this situation is $600,000 x 35% =$210,000. So, the best choice is C.

If the Depreciation Amount Is 600,000 and the Marginal Tax