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Carlos Bakery is looking to purchase a new oven. Capital and installation costs are $510,000. Carlos himself wishes to depreciate this expense in a straight-line

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Carlos Bakery is looking to purchase a new oven. Capital and installation costs are $510,000. Carlos himself wishes to depreciate this expense in a straight-line fashion over 4 years but you suggest that using a 4-year MACRS schedule (33.33% n year 1.44 45% in year 2 14.81% in year 3, and 7 4 1% n year 4 if the bakery's marginal tax rate is 25%, what is the NPV of choosing the MACRS schedule over a straight-line schedule if the discount rate is 4%? $2,903 $2,516 $2,016 $4,180 $3,484

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