ad Power Bikes faces a corporate tax rate of 40%. Its CEO, Mike Radenbaugh is adding an “e-bike” product line that will boost annual sales by $287,000 and expenses by $192,000. According to Radenbaugh’s estimates, the e-bike project entails $101,000 in fixed assets that will be fully depreciated straight-line to a zero book value over the project’s 8-year life. The depreciation tax shield is: a. $12,800 b. $14,350 c. $10,100 d. $5,050 e. $38,000

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