Chapter 12 Homework 3. eBook Kristin is evaluating a capital budgeting project that should last for 4 years. The project requires $275,000 of equipment. She is unsure what depreciation method to use in her analysis, straight-line or the 3-year MACRS accelerated method. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the I half-year convention for the straight-line method). The applicable MACRS depreciation rates are 3396, 4596, 15%, and 7%. The company's WACC is 10%, and its tax rate is 35%. 6. a. What would the depreciation expense be each year under each method? Round your answers to the nearest cent. Scenario 1 Scenario 2 (MACRS) Year Straight-Line) b. Which deprecation method would produce the higher NPV? How much higher would the NPV be under the preferred method? Round your answer to the nearest cent. Check My Work (3 remaining) Task View 10:16 AM O Type here to search a 4* V11/3/2018