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A firm buys a piece of equipment for $169,485.00 and will straight-line depreciate it to zero...

A firm buys a piece of equipment for $169,485.00 and will straight-line depreciate it to zero over five years. If the tax rate is 39.00%, what is the present value of the depreciation tax shield if the cost of capital is 11.00%?

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2 $ Year Depreciation/year Tax shield P.V factor P. V of tax shield 1$ 33,897.00 $ 13,219.83 0.900901 $ 11,909.76 33,897.00 $

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