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A firm plans to purchase a $50,000 asset that will be depreciated straight-line over a 5-year life to a zero salvage value. What is the present value of the resulting benefit from depreciation (the depreciation “tax shield”) if the tax rate is 35% and the discount rate is 10%?

$10,866.67

$13,267.75

$17,500.00

$37,908.18

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Financial Management, Finance

Category:- Financial Management
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