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. Ruddock, Nartker & Koncelik, Inc. is considering the purchase of capital equipment to open (start) a food

processing facility. They plan to compete head-on with the food company mentioned above. They say they will have a superior product! The cost of the equipment is $100,000 and will be depreciated on a straight-line basis over its 5-year useful life. No salvage value is expected. Using a 30% income tax rate, what would be the annual (yearly) cash tax savings expected from this investment (due solely to the depreciation deduction)?

A. $20,000 B. $14,000 C. $ 8,000 D. $ 6,000

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