The depreciation tax shield measures a companys tax savings, in a given year, from being able to deduct depreciation expenses from taxable income (i.e., the amount that your total taxes decrease due to depreciation). A firm has invested $20 million this year in new equipment. If

this equipment can be depreciated, straight-line, over ten years (i.e., 10% depreciation a year), and if the firm pays corporate taxes at a rate of 20% and values this investment using a 12% cost of capital, what is the present value of the depreciation tax shield arising from this project (rounded to the nearest dollar value)? A. -$17,739,911 B. $357,143 C. $1,785,714 D. $2,000,000 E. $2,260,089 F. $11,300,446