Question
Marx Corporation is making a $103,050 investment in equipment with a 5-year life.The company uses the straight-line method of depreciation and has a tax rate
Marx Corporation is making a $103,050 investment in equipment with a 5-year life.The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The company's required rate of return is 11 percent.
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https://books.google.com/books?id=aarxBQAAQBAJ&pg=PA1002&lpg=PA1002&dq=6%25+7%25+8%25+9%25+10%25+11%25+12%25+13%25+14%25+15%25+16%25+20%25+30%25+%E2%80%821+0.9434+0.9346+0.9259+0.9174+0.9091&source=bl&ots=h0RqV7VYJN&sig=P16a_XXysgGVHrf72GbAZWmjCsw&hl=en&sa=X&ved=0ahUKEwjO8c3Z7L_XAhWD4iYKHVDQB90Q6AEIKDAA#v=onepage&q=6%25%207%25%208%25%209%25%2010%25%2011%25%2012%25%2013%25%2014%25%2015%25%2016%25%2020%25%2030%25%20%E2%80%821%200.9434%200.9346%200.9259%200.9174%200.9091&f=true
What is the present value of the tax savings related to depreciation of the equipment?
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