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What is the depreciation tax shield over the life of asset

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Question - Billy's Plumbing Supplies is considering the purchase of an asset that costs $450,000 and is depreciated straight-line to zero over its six-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $120 000. If the relevant tax rate is 30%, what is the depreciation tax shield over the life of this asset?

Reference no: EM133180420

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