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Pearl City Corporation is making a $87,700 investment in equipment with a 5-year life. The company uses the straight-line method of depreciation and has a

Pearl City Corporation is making a $87,700 investment in equipment with a 5-year life. The company uses the straight-line method of depreciation and has a tax rate of 20 percent. The company's required rate of return is 11 percent.

What is the present value of the tax savings related to depreciation of the equipment?

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