Present Value of Tax Shield: A company plans to acquire an asset at a cost of $750,000 that will be depreciated for tax purposes as follows: Year 1, $210.000; Year 2. $300,000; and $80,000 per year in each of Years 3-5. A 15 percent discount rate is appropriate for this asset, and the company's tax rate is 35 percent. 

Required: Compute the present value of the tax shield. Refer to Illustration 15-12 for format.

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Year Depreciation Tax Shield at % Present Value Factor Present Value 12345 Totals Net present value of tax shield: Refer to Illustration 15-12 above to compute the present value of depreciation tax shields.