Your company is considering a new project that will require $$710,000$ of new equipment at the start of the project. The equipment will have a depreciable

life of $6$ years and will be depreciated to a book value of $$116,000$ using straight$-$line depreciation. The cost of capital is $12\%,$ and the firm's tax rate is $21\%.$

Estimate the present value of the tax benefits from depreciation.

Multiple Choice

$$99,000$

$$78,210$

$$85,476$

$$20,790$