A US firm has 800,000 of depreciation expense on its subsidiarys books. The US income tax rate is 40 percent and the spot exchange rate is 0.75/$. If the dollar depreciates to 0.65/$, how much has the dollar tax shield (i.e., the tax savings because of depreciation expense) changed?

The tax shield declined $65,641.

The tax shield declined $32,000.

The tax shield increased $65,641.

The tax shield increased $32,000.