Your Company is considering a new project that will require $690,000 of new equipment at the start of the project. The equipment will have a depreciable life of 7 years and will be depreciated to a book value of $277,000 using straight-line depreciation. The cost of capital is 13%, and the firm's tax rate is 21%. Estimate the present value of the tax benefits from depreciation.

Multiple Choice

• $46,610

• $54,796

• $12,390

• $59,000