Your Company is considering a new project that will require $700,000 of new equipment at the start of the project. The equipment will have a depreciable life of 5 years and will be depreciated to a book value of $200,000 using straight-line depreciation. The cost of capital is 11%, and the firm's tax rate is 39%. Estimate the present value of the tax benefits from depreciation.

Multiple Choice

• $39,000

• $100,000

• $144,140

• $61,000