A company recently acquired an equipment with a useful life of 5 years. It has an initial cost of $1 million and expected annual cost of $50,000 on years 1 to 5. The tax rate is 25% and the discount rate is 15%. The equipment will be depreciated using the straight line method. What is the annual depreciation tax shield?

Select one:

a. $200,000

b. $150,000

c. None of THESE

d. $50,000