Consider a four-year project that requires the firm to purchase a fixed asset that will be used for four years. The firm has the choice of using MACRS depreciation rates of 33%, 45%, 15% and 7% in Years 1, 2, 3, and 4, respectively, or the firm could use straight-line depreciation, which would entail using a depreciation rate of 25% in all four years. Why might the firm prefer to use MACRS rather than straight-line depreciation? Compared to straight line depreciation, using MACRS will decrease taxes in the early years of the project and decrease taxes in the later years of the project, and the net effect will be an increase in the project's NPV. Compared to straight line depreciation, using MACRS will decrease taxes in the early years of the project and increase taxes in the later years of the project, and the net effect will be an increase in the project's NPV The firm should be indifferent to using MACRS depreciation versus straight line depreciation because it has no impact on the project's NPV. Compared to straight line depreciation, using MACRS will increase taxes in the carly years of the project and decrease taxes in the later years of the project, and the net effect will be an increase in the project's NPV. None of the other answer choices are correct QUESTION 21 should be considered and should be ignored When estimating the incremental cash flows of a project, sank costs; synergies O depreciation: crosion crosion; synergies none of teh other answer choices are correct O changes in net working capital; interest payments to lenders