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Strauss corporation is making a 71900 investment in

Question - Depreciation Tax Shield

Strauss Corporation is making a $71,900 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 12 percent.

What is the present value of the tax savings related to depreciation of the equipment?

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Accounting Basics: Strauss corporation is making a 71900 investment in

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