Your Company is considering a new project that will require $770,000 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 $140,000 using straight-line depreciation. The cost of capital is 14%, and the firm's tax rate is 21%. Estimate the present value of the tax benefits from depreciation.

Multiple Choice

$85,745

$105,000

$22,050

$82,950