What is the present value of the depreciation tax shield


James Company put up $200,000 for a project that will return $50,000 each year for four years. $120,000 is for equipment that will be depreciated, and $80,000 is for working capital like cash that will be returned at the end of the four years. The tax rate is 30%, and the discount rate s 10 percent. What is the present value of the depreciation tax shield?

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Accounting Basics: What is the present value of the depreciation tax shield
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