Builders Supply, Inc.is considering adding a new product line that is expected to increase annual sales by $367,000 and expenses by $256,000. The project will require $165,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 8-year life of the project. The company has a marginal tax rate of 34 percent. What is the depreciation tax shield?

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A: calculation of above requirement are as follows.

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A: Given:

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Q: The net present value if the equipment were purchased is?

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A: Formulas:

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A:

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