NPV with Income Taxes: Straight-Line verses Accelerated Depreciation John Paul Jones, Inc., is a conservatively managed boat company whose motto is, The old ways are the good ways. Management has always used straight-line depreciation for tax and external reporting purposes. Although they are reluctant to change, they are aware of the impact of taxes on a projects profitability. REQUIRED: For a typical $120,000 investment in equipment with a five-year life and no salvage value, determine the present value of the advantage resulting from the use of double-declining balance depreciation as opposed to straight-line depreciation. Assume an income tax rate of 35 percent and a discount rate of 16 percent. Also assume that there will be a switch from double-declining balance to straight-line depreciation in the fourth year