Answer:
$4,760 per year
Explanation:
The annual depreciation tax shield = depreciation expense per year x tax rate = ($68,000 / 3 years) x 21% = $4,760 per year
The annual depreciation tax shield refers to the amount of money that a company's taxes will be reduced through depreciation expense. Generally companies will maximize the benefits of depreciation tax shields by using accelerated depreciation methods (bonus depreciation, double declining, etc.) or directly expensing the purchase of assets.
