Wable Inc Has Provided the Following Data to Be Used in in Evaluating

Multiple Choice

Wable Inc. has provided the following data to be used in evaluating a proposed investment project: For tax purposes, the entire initial investment without any reduction for salvage value will be depreciated over 5 years. The company uses a discount rate of 16%.
-When computing the net present value of the project, what is the annual amount of the depreciation tax shield? In other words, by how much does the depreciation deduction reduce taxes each year in which the depreciation deduction is taken?

A) $27,500
B) $77,000
C) $33,000
D) $64,167