Charlene is evaluating a capital budgeting project that should last for $4$ years. The project requires $$125,000$ of equipment and is

eligible for $100\%$ bonus depreciation. She is unsure whether immediately expensing the equipment or using straight$-$line depreciation

is better for the analysis. Under straight$-$line depreciation, the cost of the equipment would be depreciated evenly over its $4-$year life

$($ignore the half$-$year convention for the straight$-$line method$).$ The company's WACC is $8\%,$ and its tax rate is $20\%.$

a$.$ What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your

answers to the nearest dollar.

b$.$ Which depreciation method would produce the higher NPV$?$

How much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round your answer to

the nearest dollar.

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