NPV with Income Taxes: Straight-Line versus Accelerated Depreciation Carl wiliam, 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 takes on a projects profitubcidy. Required For a typical $280,000 investment in equipment with a five-year life and no salvage value, determine the present value of the advantage resulting trom the use of double-decining balance depreciation as opposed to straight-line depreciation. Assume an income tax rate of 21% and a discount rate of 20x. Also assume that there will be a switch from double-declining balance to straight-line depreciation in the fourth year. Note: Round your answers below to the nearest whole dollar. Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Value Presented is information pertaining to the cash flows of three mutually exchisive investment proposals: Select the best investment proposal using the payback period, the accounting rate of return on initial imvestment, and the net present value criteria, Assume that the organization's cost of capital is 10 percent. Note: Follow rounding instructions noted for each computation. Use a negative sign with your answers, when appropriate. NPV with Income Taxes: Straight-Line versus Accelerated Depreciation Carl wiliam, 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 takes on a projects profitubcidy. Required For a typical $280,000 investment in equipment with a five-year life and no salvage value, determine the present value of the advantage resulting trom the use of double-decining balance depreciation as opposed to straight-line depreciation. Assume an income tax rate of 21% and a discount rate of 20x. Also assume that there will be a switch from double-declining balance to straight-line depreciation in the fourth year. Note: Round your answers below to the nearest whole dollar. Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Value Presented is information pertaining to the cash flows of three mutually exchisive investment proposals: Select the best investment proposal using the payback period, the accounting rate of return on initial imvestment, and the net present value criteria, Assume that the organization's cost of capital is 10 percent. Note: Follow rounding instructions noted for each computation. Use a negative sign with your answers, when appropriate
