Your Company is considering a new project that will require $19,000 of new equipment at the start of the project. The equipment will have a depreciable life of 8 years and will be depreciated to a book value of $2,200 using straight-line depreciation. The cost of capital is 11%, and the firm's tax rate is 21%. Estimate the present value of the tax benefits from depreciation.

Multiple Choice

a. $2,100

b. $441

c. $2,269

d. $1,659