A firm plans to purchase a $50,000 asset that will be depreciated straight-line over a 5-year life to a zero salvage value. What is the present value of the resulting benefit from depreciation (the depreciation “tax shield”) if the tax rate is 35% and the discount rate is 10%?
$10,866.67
$13,267.75
$17,500.00
$37,908.18