nts Home Insert Draw Page Layout Formulas Tell me Share v % V Conditional Formatting Format as Table Cell Styles sity Clipboard Font Alignment Number Cells Editing ces 1 H Office Update To keep up-to-date with security updates, fixes, and improvement... D14 4x B D E F G 1 P12.6 DEPRECIATION METHODS 2 Kristin is evaluating a capital budgeting project that should last for 3 4 years. The project requires $900,000.00 of equipment. She is 4 unsure what depreciation method to use in her analysis, straight- 5 line or the 3-year MACRS accelerated method. 6 7 Under straight-line depreciation, the cost of the equipment would 8 be depreciated evenly over its 4-year life (ignore the half-year 9 convention for the straight-line method). 10 The applicable MACRS depreciation rates are 33%, 45%, 15%, and 11 7% as discussed in Appendix 12A. The company's WACC is 10.00%, 12 and its tax rate is 37.00%. 13 14 15 a. Calculate the depreciation expense be each year under each 16 method. 17 18 19 20 21 22 P11.14 P11.19 P12.6 P12.7 + Clipboard Font Alignment Number 2 Format as Table Cell Styles Cells Editi * Office Update To keep up-to-date with security updates, fixes, and improvement... v D14 H H B C D E F G 29 30 31 b. Which depreciation method would produce the higher NPV, 32 and how much higher would it be? 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50