Rad Power Bikes faces a corporate tax rate of 40%. Its CEO, Mike Radenbaugh is adding an e-bike product line that will boost annual sales by $377,000 and expenses by $264,000. According to Radenbaughs estimates, the e-bike project entails $173,000 in fixed assets that will be fully depreciated straight-line to a zero book value over the projects 6-year life. The depreciation tax shield is:

• $17,600

• $45,200

• $17,300

• $25,133

• $11,533