Question: The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $337,000 and expenses by $232,000. The project

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $337,000 and expenses by $232,000. The project will require $141,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 6-year life of the project. The company has a marginal tax rate of 34 percent. What is the depreciation tax shield?

$13,147
$13,147
$19,097
$15,510
$7,990

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