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Carlos Bakery is looking to purchase a new oven. Capital and installation costs are $580,000. Carlos himself wishes to depreciate this expense in a straight-line
Carlos Bakery is looking to purchase a new oven. Capital and installation costs are $580,000. 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% in year 1, 44.45% in year 2, 14.81% in year 3, and 7.41% in year 4). If the bakerys marginal tax rate is 20%, what is the NPV of choosing the MACRS schedule over a straight-line schedule if the discount rate is 6%?
no excel please
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