Harris Corp. recently purchased a manufacturing facility for $2.5 million. The company will depreciate the facility by

Question:

Harris Corp. recently purchased a manufacturing facility for $2.5 million. The company will depreciate the facility by recording $125,000 of depreciation expense each year for 20 years. Harris Corp. expects that its tax rate will be 35 percent in the coming year.

Required:
What is the tax savings (i.e., the depreciation tax shield) associated with the new facility in the coming year?