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.
What is the present value of the tax savings related to depreciation of the equipment?© BrainMass Inc. brainmass.com June 4, 2020, 12:54 am ad1c9bdddf
Depreciation tax shield is the savings in tax due to depreciation. It is calculated as depreciation amount X tax ...
The solution explains how to calculate the present value of depreciation tax shield.