Sharpe Machining Company purchased industrial tools costing $70,000, which fall in the 3-year property class under MACRS. Use Appendix A and Exhibit 16-9 for your reference. (Use appropriate factor(s) from the tables provided.) Required: 2. Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Companys after-tax hurdle rate is 10 percent, and the firms tax rate is 30 percent.

Present Value of Depreciation Tax ShieldUnder MACRS Accelerated depreciation$Under MACRS Straight-line depreciation$