Suppose that you are able to generate an annual depreciation deduction of $20,000 that would otherwise have been taxed at a 30% rate each year for 7 years. Suppose that your taxes due on sale in year 7 will be $32,000 greater than if the property had not been depreciated. Determine the net benefit of depreciation assuming a discount rate of 6.5%.

A. $12,315 B. $20,592 C. $32,907 D. $53,499 Ans: A

Please show how to get the answer $12,315. Preferably using financial calculator (not excel).