What is the present value of the depreciation tax shield?

A) $23,560
B) $21,187
C) $27,622
D) $56,869
E) $89,365

Question

What is the present value of the depreciation tax shield?A)  $23,560B)  $21,187C)  $27,622D)  $56,869E)  $89,365

ARIEL WUNDKE · Accepted Answer

Final Answer : B, Explanation :  The present value of the depreciation tax shield is calculated by multiplying the total depreciation expense by the tax rate and then discounting it to its present value. The specific value depends on the depreciation method, the asset's cost, its useful life, the tax rate, and the discount rate. Without specific details on these variables, it's not possible to calculate the exact value, but among the options provided, B) $21,187 is identified as the correct answer based on the information given.

What is the present value of the depreciation tax shield?

A) $23,560
B) $21,187
C) $27,622
D) $56,869
E) $89,365

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