Present value of tax savings related to depreciation


Strauss Corporation is making a $73,800 investment in equipment with a 5-year life. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The company's required rate of return is 14 percent.

What is the present value of the tax savings related to depreciation of the equipment? (Round the present value factor calculations to 4 decimal places, e.g. 0.2525. Round all other calculations and the final answer to 2 decimal places, e.g. 25.21.)

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Finance Basics: Present value of tax savings related to depreciation
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