Question: The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $297,000 and expenses by $200,000. The project

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $297,000 and expenses by $200,000. The project will require $109,000 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 35 percent. What is the depreciation tax shield?

Answer choices:

$11,808
$6,358
$17,325
$11,667
$33,950

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