Question: ABC, Inc. is evaluating a project that will increase their annual sales by an estimated $307,000. Their expenses will increase by $208,000. This project will

ABC, Inc. is evaluating a project that will increase their annual sales by an estimated $307,000. Their expenses will increase by $208,000. This project will require an upfront investment in fixed assests in the amount of $117,000. This fixed asset will be depreciated using the straight-line method to a zero book value over the 8-year life of the project. ABC, Inc. has a marginal tax rate of 34 percent. What is the depreciation tax shield?

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