Your Company is considering a new project that will require $100,000 of new equipment at the start of the project. The e

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answerhappygod
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Your Company is considering a new project that will require $100,000 of new equipment at the start of the project. The e

Post by answerhappygod »

Your Company is considering a new project that will require
$100,000 of new equipment at the start of the project. The
equipment will have a depreciable life of 10 years and will be
depreciated to a book value of $5,000 using straight-line
depreciation. The cost of capital is 14%, and the firm's tax rate
is 21%. Estimate the present value of the tax benefits from
depreciation.
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