The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $387,000 and expenses by $272,000. The project will require $181,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 8-year life of the project. The company has a marginal tax rate of 35 percent. What is the depreciation tax shield?

Multiple Choice

$7,919

$15,867

$19,608

$40,250

$16,931