Managerial Accounting: E9-11 Strauss Corporation is making a $60,000 investment



EXERCISE 9-11. Depreciation Tax Shield
Strauss Corporation is making a $60,000 investment in equipment with a five-year life.
The company uses the straight-line method of depreciation and has a tax rate of 40 percent.
The company's required rate of return is 12 percent.

Required
What is the present value of the tax savings related to depreciation of the equipment?
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