Droids-R-Us Inc. (DRU), is considering the installation of a new production line to make service mechanoids. The cost of the new manufacturing equipment is $2.2 million. The machines are classified as 7-year properties. (MACRS rates are provided in the table, below.) The machines will be purchased at the beginning of 2014. (DRU uses a mid-year placed-in-service convention.)
DRU's engineers estimate that the new assembly line could be ready for operations in early 2014. Annual EBITDA is forecasted to be $1.3M for 2014 and all subsequent years of the project. DRU's marginal tax rate is 35%.
What is the value of the depreciation tax shield in 2015? (Do NOT assume that the equipment is salvaged in 2015.) Round your answers to the nearest dollar.
| Year | 5-Year | 7-Year | 10-Year |
| 1 | 20.00% | 14.29% | 10.00% |
| 2 | 32.00% | 24.49% | 18.00% |
| 3 | 19.20% | 17.49% | 14.40% |
| 4 | 11.52% | 12.49% | 11.52% |
| 5 | 11.52% | 8.93% | 9.22% |
◦ $110,033
◦ $188,573
◦ $134,673
◦ $314,380
◦ $538,780
First Line of Defence
This Black-browed Albatross has been hooked on a long-line.
projections of future oil production
When the service work is completed, the hoist should be raised slightly and the safety released ...
Nuchal Line
Offset Method Plot of Land with Length Line