Arsenal Company Is Considering an Investment in Equipment Costing $30,000

Arsenal Company is considering an investment in equipment costing $30,000 with a five-year life and no salvage value. Arsenal uses straight-line depreciation and is subject to a 35 percent tax rate. The expected net cash inflow before depreciation and taxes is projected to be $20,000 per year.
Over the life of the project, the total tax shield created by depreciation is:

A) $10,500
B) $39,600
C) $20,400
D) $10,750