Your Firm Needs to Either Buy or Lease $230,000 Worth

Your firm needs to either buy or lease $230,000 worth of vehicles. These vehicles have a life of 4 years after which time they are worthless. The vehicles belong in CCA class 10 (a 30% class) and can be leased at a cost of $68,000 a year for the 4 years. The corporate tax rate is 34% and the cost of debt is 10%.

What is the present value of the depreciation tax shield?

A) $44,375
B) $62,114
C) $73,925
D) $96,375
E) $137,950