The following information relates to a proposal for the Prancer Company. What is the annual depreciation tax shield?

• Initial Outlay = $950,000
• Useful Life = 10 years
• Salvage Value at End = 0
• Annual Revenues = $360,000
• Total Variable Costs = $120,000
• Annual Fixed costs (excluding depreciation) = $88,000
• Required Rate of Return = 12%
• Corporate tax rate = 25%

The company uses straight-line depreciation.