Suppose That You Are Able to Generate an Annual Depreciation

question 22

Multiple Choice

Suppose that you are able to generate an annual depreciation deduction of $34,000 that would otherwise have been taxed at a 30% rate each year for 5 years. Determine the present value of the annual tax savings using a 7.5% discount rate.

• A) $26,683
• B) $41,268
• C) $96,292
• D) $137,560