Accounting for Decision Making and Control 6th Edition by Jerold Zimmerman

Exercise 4

A proposed cost-saving device has an installed cost of $59,400. It will be depreciated for tax purposes on a straight-line basis over three years (zero salvage), although its actual life will be five years. The tax rate is 34 percent and the required rate of return on investments of this type is 10 percent.
What must be the pretax cost savings per year to favor the investment Assume a zero salvage value for the device at the end of the five years.