Trenton Fabrication Company purchased industrial tools costing $220,000, which fall in the 3-year property class under MACRS. (Round your final answers to the nearest dollar amount.)

Required:

1. Prepare a schedule of depreciation deductions assuming:

a. The firm uses the accelerated depreciation schedule specified by MACRS

b. The firm uses the optional straight-line depreciation method and the half-year convention.

2. Calculate the present value of the depreciation tax shield under each depreciation method listed in part (1). Trenton Fabrication Companys after-tax hurdle rate is 16 percent, and the firms tax rate is 30 percent.