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Find present value of depreciation tax shield from deduction

A company anticipates a depreciation deduction of $10,000 in year 2 of a project. The company"s tax rate is 30% and its discount rate is 10%. The present value of the depreciation tax shield resulting from this deduction is closest to:

A) $3,000

B) $2,479

C) $5,785

D) $7,000

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Finance Basics: Find present value of depreciation tax shield from deduction

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find present value of depreciation tax shield from deduction

Reference No:- TGS0671411

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Determine the amount of the completed gift

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Q : Find present value of depreciation tax shield from deduction

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find present value of depreciation tax shield from deduction

Reference No:- TGS0671411

Recent Questions Asked Finance Basics

Q : Determine the amount of the completed gift

Q : Determining the total cash outflow

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Q : Find present value of depreciation tax shield from deduction

Q : Compute the effect on income

Q : Expected return on resulting portfolio

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