Question: The Lumber yard is considering adding a new product line that is expected to increase annual sales by $ 3 8 7 , 0 0

The Lumber yard is considering adding a new product line that is expected to increase annual sales by $387,000 and expenses by $272,000. The project will require $181,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 8-year life of the project. The company has a marginal tax rate of 23 percent. What is the depreciation tax shield?

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