Question

Questions #2 to #4 use the following setup. Markov Manufacturing recently spent $15 million to purchase some equipment used in the manufacture of disk drives. The firm expects that this equipment will have a useful life of five years, and it will be worthless afterwards. Assume the marginal corporate tax rate is 35%. If the company plans to use straight-line depreciation, what is the annual depreciation tax shield? Question 3 1 pts Rather than straight-line deprcciation, suppose Markov will use the MACRS depreciation method for the five-ycar life of the cquipment. MA Year Rate 20.00% 32.00% 19.20% 11.52% 11.52% 5·76% What are the depreciation tax-shields each year for this equipment? Year 2 Year 3 Year Year 5 Year 6 OA. 1,1)$(NXX> 1,1S(),D00 1,050,(XKI 1,050.000 1,050,(XX} 1) B.1.050.000 1.680,000 ,008,000 604800 604.800 302.400 C.1,050,000 250,00002,000 604,800 04,800 302,400 D.1,050,000 1680,000 ,008,000 8,000 648,000 D