depreciation tax shield

HERE TO REIEW LEARNING ORECTIE Depreciation Tax Shields Lincuin Campany has purchased equgment for $600,0o0 After it is fully depreciated. the equipment will have no salvage value Lincoln may select ether of the following depreciation schedules for tax purposes: Optian1 Option 2 Deprediation Degreei 120,0000000 120,000 115.20 120,000 120 000 120.00 34560 Assuming a 40% tax rate (rd a 12% desred annual return compute the tota! present value of the tax smres provided by these alternative deprecation tax shiess Round anrswers to the nearest whole number. use rounded arwers to calcdate tocal Option t depreciaion Tear (N) Tas Savings IFVI Present Vake LOOD 43090 76300 61228 76 276a 177.14 Option 2 depreciation IN) Tax Savings (PV) Present Value 254 x .000 uco 27235 4000 3 16375 which depreciation schedule would be more attractive to Lincoln Option # Check