Question: The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $322,000 and expenses by $220,000. The project

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $322,000 and expenses by $220,000. The project will require $129,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 7-year life of the project. The company has a marginal tax rate of 34 percent. What is the depreciation tax shield?

Multiple Choice

$34,680
$15,640
$6,266
$12,467
$14,190

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