Charlene is evaluating a capital budgeting project that should last for $4$ years. The project requires $$725,000$ of equipment and is eligible for $100\%$ bonus depreciation. She is unsure whether immediately expensing the equipment or using straight$-$line depreciation is better for the analysis. Under straight$-$line depreciation, the cost of the equipment would be depreciated evenly over its $4-$year life $($ignore the half$-$year convention for the straight$-$line method$).$ The company's WACC is $10\%,$ and its tax rate is $25\%.$Charlene is evaluating a capital budgeting project that should last for $4$ years. The project requires $$725,000$ 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 $10\%,$ and its tax rate is $25\%.$

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 debreciation 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.

What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollar.

Year Scenario $1$

$($Straight$-$Line$)$ Scenario $2$

$($Bonus Depreciation$)$

$0$ $

$

$1$ $

$

$2$ $

$

$3$ $

$

$4$ $

$

Which depreciation method would produce the higher NPV$?$

$-$Select$-$

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

$