Rush Corporation plans to acquire production equipment for $615,000 that will be depreciated for tax purposes as follows: year 1, $123,000; year 2, $213,000; and in each of years 3 through 5, $93,000 per year. A 6 percent discount rate is appropriate for this asset, and the companys tax rate is 40 percent. Use Exhibit A.8 and Exhibit A.9.

a. Compute the present value of the tax shield resulting from depreciation. (Round PV factor to 3 decimal places and other intermediate calculations t Present value of the tax shield b. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($123,000 per year). (Round PV factor to 3 decimal calculations to nearest whole number.) to neateat whele umnoa Present value of the tax shield