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Shepard Industries is evaluating a proposal to expand its current distribution facilities. ...

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Shepard Industries is evaluating a proposal to expand its current distribution facilities. ...

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Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected the project will produce the following cash flows for the first two years (in millions).

Year	1	2
Revenues	1200	1400
Operating expense	450	525
Depreciation	240	280
Increase in working capital	60	70
Capital expenditures	300	350
Marginal corporate tax rate	30%	30%

The depreciation tax shield for Shepard Industries project in year 2 is closest to:

▸ $96

▸ $196

▸ $84

▸ $72

Textbook

Fundamentals of Corporate Finance

Edition: 2^nd

Authors: Berk, DeMarzo, Harford

Read 105 times

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I appreciate what you did here, answered it correctly Smiling Face with Open Mouth

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