What Is the Present Value at a 10 Percent Discount

question 36

Multiple Choice

What is the present value at a 10 percent discount rate of the depreciation tax shield for a firm in the 35 percent tax bracket that purchases a $50,000 asset being depreciated at 15 percent declining balance with a half-year rule, disposed from the existing asset pool at zero?

• A)$10,866
• B)$10,023
• C)$17,500
• D)$37,908