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Wearout Corporation has a shoelace machine with an original cost of $100,000. Depreciation expense for the machine this year is 10% of original cost. The company's tax rate is 21%. What is the depreciation tax shield for this year for this machine? Group of answer choices $21,000 $10,000 $2,100 $7,900

Wearout Corporation has a shoelace machine with an original cost of $100,000. Depreciation expense for the machine this year is 10% of original cost. The company's tax rate is 21%. What is the depreciation tax shield for this year for this machine? Group of answer choices $21,000 $10,000 $2,100 $7,900

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Wearout Corporation has a shoelace machine with an original cost of $100,000.  Depreciation expense for the machine this year is 10% of original cost.  The company's tax rate is 21%.  What is the depreciation tax shield for this year for this machine?

Group of answer choices
$21,000
$10,000
$2,100
$7,900
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