Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 31

A company purchases an asset that costs $10,000. This asset qualifies as three-year property under MACRS. The company uses an after-tax discount rate of 12 percent and faces a 40 percent income-tax rate. Use the appropriate present value factors found in Appendix C, Table 1 to determine the present value of the depreciation deductions for this firm over the specified four-year period.