NPV with Income Taxes: Straight-line versus Accelerated Depreciation John Paul 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 purpose. Although they are reluctant to change, they are aware of the impact of taxes on a project profitability. For a typical $100.000 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 40 percent and a discount rate of 16 percent. Also assume that will be a switch from double- declining balance to straight-line depreciation in the fourth year