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A company is planning the replacement of an asset bought three years ago at a cost of $100,000. Under MACRS, the asset was in five year recovery period class. The new asset will cost $150,000 today and is in the same MACRS class. What will be the incremental tax savings in the first year of the replacement project arising from depreciation? Assume a corporate tax rate of 34%.

a. None of the following.
b. $30,000
c. $18,500
d. $11,500
e. $3,910

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