For part A: Do we need split the cost of the 64,000 insulation cost from the 512,000 total cost? So that the balance cost (512,000 less 64000) 448000, will have a separate depreciation of 89,600 per year. Should there be tax savings from this depreciation for the 44800 over the 5 years?

Please show work. Thank you.

Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $512,000. Of this sum, $64,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $64,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense? b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment? (Round your answer to the nearest whole dollar amount.) a. Present value b. Present value