Rad Power Bikes faces a corporate tax rate of 35%. Its CEO, Mike Radenbaugh is adding an e-bike product line that will boost annual sales by $387,000and expenses by $272,000. According to Radenbaughs estimates, the e-bike project entails $181,000 in fixed assets that will be fully depreciated straight-line to a zero book value over the projects 8-year life. The depreciation tax shield is:

Multiple Choice

• $15,867

• $40,250

• $19,608

• $16,931

• $7,919