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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 25%.

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-Straight-LineBonus DepreciationItem 11 How much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round your answer to the nearest dollar. $

pt. 2

Rini Airlines is considering two alternative planes. Plane A has an expected life of 5 years, has an after-tax cost of $90 million, and will produce after-tax cash flows of $40 million per year. Plane B has a life of 10 years, has an after-tax cost of$127 million, and will produce after-tax cash flows of $35 million per year. Rini plans to serve the route for 10 years. The companys WACC is 7%. If Rini needs to purchase a new Plane A, the after-tax cost will be $105 million, but cash inflows will remain the same. Should Rini acquire Plane A or Plane B? Explain your answer. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answer to two decimal places.

Plane -Select- A or B is the better project and will increase the company's value by $ millions.