Billy's Plumbing Supplies Is Considering the Purchase of an Asset

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 per cent,what is the depreciation tax shield over the life of this asset of this asset?

A) -$22 500
B) -$75 000
C) $75 000
D) $52 500
E) $22 500